The legislator has tasked trading venue operators, i.e. stock exchanges and multilateral trading facilities, with establishing and enforcing their own organisational and trading regulations, as set out in Article 27 of the Financial Market Infrastructure Act (FinMIA).
FINMA is authorised to monitor the regulations of a trading venue to ensure they are in line with the legal framework. Consequently, all regulations and changes to them must be submitted to FINMA for approval. Other key aspects of supervision are:
Independent monitoring organisations established by the trading venue operators are responsible for markets supervision in the first place. FINMA, with the help of these organisations, ensures that suspicions of market abuse (e.g. insider trading and market manipulation) are investigated. Investigations may lead FINMA to launch enforcement proceedings and can in some cases result in proceedings being initiated by the responsible prosecuting authority.
Generally, organised trading systems (OTS) lack one of the three core elements of trading venues, i.e. multilateral trading, non-discretionary conclusion of contracts or trading in financial instruments qualifying as securities.
Contrary to trading venues, OTS are not regarded as financial market infrastructures. FINMA therefore supervises OTS through the relevant operators such as banks, securities dealers and trading venues.