COSI - Collateral Secured Instruments

COSI® are structured products with a minimal counterparty risk. This protection is provided by means of a collateral pledge. Investors thus profit from increased protection on the invested capital. This unique service is offered by SIX Swiss Exchange Ltd in collaboration with SIX Securities Services and Eurex Zurich Ltd.

Certificates are bearer debt instruments (claims). The investor who purchases a certificate assumes a default risk that varies according to the creditworthiness of the issuer. The insolvency of the issuer could therefore result in a total loss for the investor. In order to minimize this risk, SIX Swiss Exchange is offering a service for the collateralization of certificates in collaboration with SIX Securities Services and Eurex Zurich Ltd. The collateralization is based on the "Framework Agreement for Collateral Secured Instruments"[pdf], which the issuer and collateral provider conclude with SIX Swiss Exchange and SIX Securities Services.

The issuer, collateral provider, and market maker may be legally separate companies. With regard to the collateralization of certificates, the collateral provider must in all cases fulfill the following special conditions:

• legally domiciled in Switzerland;
• authorized as a domestic bank or domestic securities dealer;
• participant in SIX Securities Services; and
• participant in the Collateralization Market of Eurex Zurich Ltd.

Administration of the collateral is accomplished via the established technical infrastructure of SIX Securities Services and Eurex Zurich Ltd (Collateralization and SecLend Market). The regulations of SIX Swiss Exchange, SIX Securities Services, and Eurex Zurich Ltd that apply to the collateralization of certificates are listed under the Conditions for Issuers.

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Passive financial instruments in Switzerland