Constitution and laws
The constitutional basis of the Swiss currency and the activity of the Swiss National Bank are contained in article 99 of the Federal Constitution. The monetary article embodies the National Bank's independence in the Constitution, as also the obligation to set aside adequate currency reserves from its earnings, part of them in gold. This is serves to help maintain public confidence in monetary stability. The central bank mandate consists in the obligation of the National Bank to pursue a monetary policy serving the interests of the country as a whole. In addition, art. 99 para. 4 of the Federal Constitution determines that the National Bank must distribute at least two-thirds of its net profits to the cantons.
National Bank Act (NBA)
The National Bank Act (NBA) of 3 October 2003 (in force since 1 May 2004) serves as the statutory basis for the National Bank and its activity. The National Bank Act sets out in detail the SNB's constitutional mandate and its independence. The corollary to this independence is the SNB's accountability and information obligation towards the Federal Council, Parliament and the public (arts. 5-7 NBA). Furthermore, the NBA implements the SNB's constitutional mandate of setting aside sufficient monetary reserves from its earnings. Explicit rules concerning the calculation of profits allow the SNB to set aside provisions in line with the development of the Swiss economy (art. 30 NBA).
Moreover, the NBA sets out the instruments and monetary policy powers that the SNB has at its disposal to implement its monetary policy. The instruments based on market transactions are only broadly outlined in the provisions regarding the SNB's scope of business (arts. 9-13 NBA); further details are contained in the Guidelines on Monetary Policy Instruments and the Investment Policy Guidelines. The monetary policy powers include the compilation of financial market statistics (arts. 14-16 NBA), the obligation of the banks to hold minimum reserves (arts. 17-18 NBA) and the oversight of systemically important financial market infrastructures (arts. 19-21 NBA). With effect from 1 January 2016, some of the provisions on the oversight of systemically important financial market infrastructures are set out in arts. 22 et seq. and art. 83 of the Financial Market Infrastructure Act (FMIA). Individual provisions on the monetary policy powers are contained in the National Bank Ordinance.
The National Bank Act also governs the SNB's organisational structure (arts. 3, 33-48 NBA). The corporate bodies of the SNB are the eleven-member Bank Council, the Governing Board, the Audit Board and the General Meeting of Shareholders.
National Bank Ordinance (NBO)
Implementing regulations on the monetary policy powers of the National Bank (compilation of statistics, minimum reserve regulations, and oversight of systemically important financial market infrastructures) are laid down in an ordinance adopted by the SNB Governing Board on 18 March 2004. The legal basis for this ordinance is art. 15 para. 3, art. 18 para. 5 and art. 20 para 5 NBA.
In the chapter "Statistical surveys", the NBO spells out the principles on data collection as well as the rights and obligations of the financial market participants required to provide information. The collection of statistical data must adhere to the principle of reasonableness. The coverage and frequency of statistical surveys as well as the parties required to report statistical data are described in the Annex to the NBO.
The chapter on "Minimum reserves" is relatively brief, since the most important elements of the minimum reserve regulations are already laid down in the wording of the law itself.
Finally, the chapter "Oversight of systemically important financial market infrastructures" contains the provisions on determining systemically important central counterparties, central securities depositories and payment systems and their business processes, as well as the special requirements with which they must comply. These requirements are based on international standards. In order for the SNB to identify the central counterparties, central securities depositories and payment systems that pose a risk to system stability, they must provide the SNB with necessary information and documentation.
Federal Act on Currency and Payment Instruments
The Federal Act on Currency and Payment Instruments, which entered into force on 1 May 2000, lays down the currency unit and contains regulations on all the characteristic features of currency and money (legal tender). In addition to coins and banknotes, Swiss franc denominated sight deposits at the Swiss National Bank are also deemed to be legal tender. The institutions that process payment transactions (commercial banks and several of their jointly operated organisations, Swiss Post and large security transport companies) are entitled to open a sight deposit account with the National Bank.