Oversight of financial market infrastructures
The Swiss National Bank’s oversight mandate
The National Bank Act requires the SNB to oversee financial market infrastructures in Switzerland and also, in certain circumstances, abroad. In addition, the SNB lays down special requirements for the operation of financial market infrastructures which pose risks for the stability of the financial system. The implementing provisions on oversight are set out in the National Bank Ordinance. Since 1 January 2016, some of the provisions on oversight of systemically important financial market infrastructures are contained in the Financial Market Infrastructure Act (FMIA).
By overseeing financial market infrastructures operated by the private sector, the SNB promotes their security and efficiency. In so doing, it gives priority to reducing systemic risk. First, it is important to ensure that neither technical system failure nor financial difficulties on the part of financial market infrastructure operators give rise to major credit or liquidity problems for financial intermediaries or that these result in severe disruption on financial markets. Second, the contractual framework, and, in particular, the rules and procedures for the different systems should be formulated such that payment or delivery difficulties of individual system participants do not spill over to other financial intermediaries, linked financial market infrastructures or the financial markets. The sole objective of system oversight by the SNB is to ensure financial stability, which in turn is a precondition for the effectiveness of monetary policy. Individual creditor protection, consumer protection or the protection of financial market infrastructures from criminal abuse, however, are not objectives of SNB oversight.