SIX x-clear and SIX SIS Investment Policy

Introduction

The present publication outlines the investment policy of SIX x-clear and SIX SIS 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 SIX SIS 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.

General Investment Policy

The investment strategy of SIX x-clear and SIX SIS 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 and participants of SIX SIS.

Investment Rules

SIX x-clear and SIX SIS 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 fulfils 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 and
SIX SIS are restricted in their 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.