Federal law: supervised self-regulation of stock exchanges
The purpose of the Federal Act on Stock Exchanges and Securities Trading (SESTA) is to
ensure the efficiency, liquidity and transparency of the capital market. The provisions of the Act
include requirements for establishing and operating securities exchanges.
SESTA has two main objectives:
Within the scope of functional safeguards, the Act protects the operating capability of a
stock exchange as an institution. This is to ensure that exchanges can perform as smoothly
as possible their crucial economic function of allocating financial resources in the best way.
With regard to investor protection, the Act safeguards the individual interests of
the investor. This is to ensure that no investor is put at a disadvantage by banks,
securities dealers, issuers or other investors.
Who supervises the implementation of SESTA?
SESTA contains a few fundamental rules but, in Article 4, also gives stock exchanges broad scope
for self-regulation. Stock exchanges enjoy a certain degree of autonomy, but are
subject to overall supervision by the Swiss Financial Market Supervisory Authority
(FINMA).
What form does self-regulation take?
Self-regulation essentially means that the necessary rules and procedures are adopted within
the private sector. The principle of self-regulation gives stock exchanges a degree of
autonomy that is determined in each specific case. Swiss Financial Market Supervisory Authority
(FINMA) ensures that the relevant legal and
regulatory rules are complied with.
Self-regulation encompasses the following aspects:
