Securities Firms

General Remarks on Securities Firms
Authorisation requirements
  • Do all securities firms according to SESTA classify as securities firms according to FinIA?

    According to art. 41 FinIA, the term “securities firm” includes the previous categories of client trader, principal trader and market maker (cf. also “Who is considered a securities firm requiring an authorization?“). The previous securities firms categories of the issuing house and the derivatives house are not included in the FinIA as securities firms, but the corresponding activities still require an authorization as a bank or securities firm (art. 12 FinIA).

  • Who is considered a securities firm requiring an authorization?

    Pursuant to art. 41 FinIA, a securities firm is defined as a commercial entity that

    1. trades in its own name for the account of the client with securities (called client dealer);
    2. trades in securities on its own account, mainly on the financial market and (i) could thereby jeopardize the functioning of the financial market, or (ii) acts as a member of a trading venue (referred to as a principal trader); or
    3. trades in securities for its own account on a short-term basis and quotes prices for individual securities publicly on an ongoing basis or upon request (referred to as market maker).
  • What is meant by "professional activity"?

    In the FinIA, the concept of professional activity is defined in the general provisions as any independent economic activity aimed at permanent gains (Art. 3 FinIA). For securities firms, the term is further specified in Art. 65 FinIO. In particular, trading in securities in one’s own name for the account of clients shall only be considered a professional activity if accounts are maintained or securities are held directly or indirectly for more than 20 clients (Art. 65 para. 1 FinIO). However, for the purposes of this provision, domestic and foreign banks and securities firms, other state-supervised companies, shareholders and partners with qualified shareholdings and persons with economic or family ties to them, as well as institutional investors with professional treasury operations (Art. 65 para. 2 FinIO) are not deemed to be clients.

  • Where are the licensing requirements for securities firms according to FinIA regulated?

    The licensing requirements for securities firms can be found on the one hand under the general provisions in art. 7 f. of the Swiss Code of Obligations. FinIA. Then the special part of the FinIA in art. 41 ff. FinIA sets out special licensing requirements for securities firms.

Requirements for securities firms
Transition periods

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