Info Center Clearing

SIX x-clear AG provides all core CCP services directly to its members and markets.

Core clearing competences are conducted by SIX x-clear in a streamlined and efficient way. Additional services are provided by SIX Securities & Exchanges. The result is best-in-class operational excellence for day-to-day business.

In accordance with the Swiss National Bank Ordinance (NBO), SIX Securities & Exchanges (BXS) maintains default procedures for SIX x-clear AG (“SIX x-clear”) and SIX SIS AG (“SIX SIS”). These procedures are designed to efficiently support any member of SIX x-clear or participant of SIX SIS in the event of a member’s/participant’s default while also protecting the Swiss financial market infrastructure.

In line with the Swiss National Bank Ordinance, SIX x-clear discloses its investment strategy to its participants. The investment strategy ensures that the funds made available to SIX x-clear are invested in liquid assets which have low levels of credit and market risk.

The publication outlines the investment policy of SIX x-clear and presents the respective regulations as enacted by the Board of Directors and communicated to the supervisory authorities. It shall provide transparency regarding the investment risks in relation to the collateral provided to SIX x-clear and in relation to the investable excess liquid funds. It further defines the types of investments that can be made and the relevant rules to be observed.

The investment strategy of SIX x-clear is embedded within SIX Group’s overall Risk Policy and Risk Appetite Framework. It follows a highly conservative approach with the main objective of ensuring the provision of liquidity with minimal credit and market risks. A secondary objective is the achievement of a certain return on investments, which will allow for tighter pricing of the services used by the Members of SIX x-clear.

SIX x-clear shall:

• only hold cash or invest in highly liquid financial instruments with minimal market, credit and liquidity risk under consideration of the incurred costs and returns;

• deposit funds either at the Swiss National Bank (CHF) or at commercial banks for which minimum rating criteria and limits apply;

• make use of the custodian network of SIX SIS, which fulfills the highest standards in respect of custodian selection and counterparty requirements;

• minimize risk from foreign currency positions;

• give secured arrangements preference over unsecured deposits.

SIX x-clear will only enter into and maintain direct relationships with custodians if this is permitted under law and by the relevant authorities.

In order to avoid credit risk and preserve current and future values, SIX x-clear is restricted in its investments in financial instruments:

• to high-quality counterparties with a minimum rating of AA- (as provided by Standard & Poor’s or the equivalent of any other major rating firm);

• by the application of concentration limits and minimum issue size, duration and issuer domicile criteria;

• by the limitation of their investment universe to securities eligible for transactions in repurchase agreements with central banks (to ensure short-term liquidity provision), whereby such an investment universe excludes securities issued by SIX SIS participants and SIX x-clear Members.

SIX x-clear is licensed as a central counterparty (CCP) under the Swiss Financial Market Infrastructure Act (FMIA). On 19 June 2015, the Swiss parliament enacted the Swiss Financial Market Infrastructure Act (FMIA). With its entry into force, a separate statutory basis for Financial Market Infrastructures (FMIs) was created which requires central counterparties (CCPs), central securities depositories (CSDs) and exchanges to be licensed as FMIs. The FMIA mandates strict rules in order to grant such a license.
The Swiss Financial Market Supervisory Authority, FINMA, accorded SIX x-clear this license on 28 March 2018, acknowledging SIX’ regulatory compliance with the legal framework in force in Switzerland. This FMI license shows that SIX holds up to the high standards set by the FMIA, and will continue to serve our Members diligently in this highly regulated market.
The banking license previously in force was returned with the licensing under FMIA. Nevertheless, SIX x-clear remains subject to supervision by FINMA and the Swiss National Bank (SNB) for services of systemic importance.

On 26 March 2016, SIX x-clear was recognized by the European Securities and Markets Authority as a third-country CCP under Chapter 4 of Title III of EMIR. This recognition grants SIX x-clear the right to provide clearing services to clearing members and trading venues throughout the European Union. As a prerequisite of the recognition, SIX x-clear is also registered through the German Authorities as a designated payment and securities settlement system under the European Securities Market Authority’s Settlement Finality Directive (see under Germany: Here).

In order to be able to continue offering its services in the UK (now that UK has left the EU), SIX x-clear applied for recognition as a third country CCP to the BoE. As a prerequisite of the recognition, SIX x-clear is also registered through the UK Authorities as a designated payment and securities settlement system under the European Securities Market Authority’s Settlement Finality Directive. This designation is expected to remain in force.