Supervision of trading venues

The legislator has tasked trading venue operators, i.e. stock exchanges and multilateral trading facilities, with establishing and enforcing their own organisational and trading regulations, as set out in Article 27 of the Financial Market Infrastructure Act (FinMIA).

Self-regulation for trading venue operators

Operators are largely responsible for regulating whether participants and/or securities are allowed access to the trading venue and for preparing regulations to monitor trading. They are also charged with establishing a listing body and a surveillance unit. 

FINMA supervision of trading venue operators

FINMA is authorised to monitor the regulations of a trading venue to ensure they are in line with the legal framework. Consequently, all regulations and changes to them must be submitted to FINMA for approval. Other key aspects of supervision are:

• compliance with organisational requirements 
• maintaining an effective internal control system
• operating appropriate IT systems
• assuring proper business conduct.

Market supervision and enforcement

Independent monitoring organisations established by the trading venue operators are responsible for markets supervision in the first place. FINMA, with the help of these organisations, ensures that suspicions of market abuse (e.g. insider trading and market manipulation) are investigated. Investigations may lead FINMA to launch enforcement proceedings and can in some cases result in proceedings being initiated by the responsible prosecuting authority.

Organised trading systems

Generally, organised trading systems (OTS) lack one of the three core elements of trading venues, i.e. multilateral trading, non-discretionary conclusion of contracts or trading in financial instruments qualifying as securities.

Contrary to trading venues, OTS are not regarded as financial market infrastructures. FINMA therefore supervises OTS through the relevant operators such as banks, securities dealers and trading venues.