The OTC Derivatives Risk Mitigation and Central Counterparties (Equivalence) (Switzerland) Regulations 2025
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3 Requirements for equivalence under Article 13(2) of EMIR
(1) For the purpose of regulation 2, the legal, supervisory and enforcement arrangements of Switzerland shall only be considered as equivalent to the requirements of Article 11 of EMIR where all of the following conditions are satisfied— (a) the transaction concerns a relevant OTC derivative contract; (b) the counterparties to the relevant OTC derivative contract are subject to risk mitigation techniques applicable under Swiss law for OTC derivative contracts not cleared by a CCP; (c) the UK counterparty to the relevant OTC derivative contract complies with the initial margin model requirements; (d) where one of the counterparties to the relevant OTC derivative contract is an institution, or a Swiss counterparty that would qualify as an institution if it were established in the UK, and the relevant OTC derivative contract is a foreign exchange swap or a foreign exchange forward, the UK counterparty complies with the variation margin requirements. (2) For the purpose of this regulation— “foreign exchange forward” means a physically settled OTC derivative contract that solely involves the exchange of two different currencies on a specific future date at a fixed rate agreed on the trade date of the contract covering the exchange; “foreign exchange swap” means a physically settled OTC derivative contract that solely involves an exchange of two different currencies on a specific date at a fixed rate that is agreed on the trade date of the contract covering the exchange, and a reverse exchange of the two currencies at a later date and at a fixed rate that is also agreed on the trade date of the contract covering the exchange; “initial margin model requirements” means the requirements in Articles 14 to 18 of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty; “institution” has the meaning given in Article 4(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012; “relevant OTC derivative contract” means a derivative contract— entered into by a UK counterparty and a Swiss counterparty, which is not cleared by a CCP, and the execution of which does not take place on a regulated market, a multilateral trading facility or an organised trading facility, which have the meanings given in Article 2(1)(13), (14) and (15) of Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012; “Swiss counterparty” means a counterparty that is established in Switzerland; “UK counterparty” means a financial counterparty or a non-financial counterparty, that is established in the UK; “variation margin requirements” means the requirements in Articles 10 and 12 of Commission Delegated Regulation (EU) 2016/2251.
3 Requirements for equivalence under Article 13(2) of EMIR
(1) For the purpose of regulation 2, the legal, supervisory and enforcement arrangements of Switzerland shall only be considered as equivalent to the requirements of Article 11 of EMIR where all of the following conditions are satisfied— (a) the transaction concerns a relevant OTC derivative contract; (b) the counterparties to the relevant OTC derivative contract are subject to risk mitigation techniques applicable under Swiss law for OTC derivative contracts not cleared by a CCP; (c) the UK counterparty to the relevant OTC derivative contract complies with the initial margin model requirements; (d) where one of the counterparties to the relevant OTC derivative contract is an institution, or a Swiss counterparty that would qualify as an institution if it were established in the UK, and the relevant OTC derivative contract is a foreign exchange swap or a foreign exchange forward, the UK counterparty complies with the variation margin requirements. (2) For the purpose of this regulation— “foreign exchange forward” means a physically settled OTC derivative contract that solely involves the exchange of two different currencies on a specific future date at a fixed rate agreed on the trade date of the contract covering the exchange; “foreign exchange swap” means a physically settled OTC derivative contract that solely involves an exchange of two different currencies on a specific date at a fixed rate that is agreed on the trade date of the contract covering the exchange, and a reverse exchange of the two currencies at a later date and at a fixed rate that is also agreed on the trade date of the contract covering the exchange; “initial margin model requirements” means the requirements in Articles 14 to 18 of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 supplementing Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories with regard to regulatory technical standards for risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty; “institution” has the meaning given in Article 4(3) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012; “relevant OTC derivative contract” means a derivative contract— entered into by a UK counterparty and a Swiss counterparty, which is not cleared by a CCP, and the execution of which does not take place on a regulated market, a multilateral trading facility or an organised trading facility, which have the meanings given in Article 2(1)(13), (14) and (15) of Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012; “Swiss counterparty” means a counterparty that is established in Switzerland; “UK counterparty” means a financial counterparty or a non-financial counterparty, that is established in the UK; “variation margin requirements” means the requirements in Articles 10 and 12 of Commission Delegated Regulation (EU) 2016/2251.
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