FINMA's New Liquidity Ordinance: What Swiss Banks and Securities Firms Must Prepare For
Switzerland's financial regulator, FINMA, has published a new Ordinance on the Liquidity of Banks and Securities Firms, known as the LiqO-FINMA. Effective 1 January 2027, it formally replaces Circular 2015/2 "Liquidity risks – banks". The move is not a wholesale regulatory overhaul, but it carries specific operational, reporting, and accounting consequences that Swiss banks, securities firms, and any accounting or compliance function serving them need to absorb before the end of 2026.
Why FINMA Is Issuing a New Ordinance
The trigger is procedural as much as substantive. Article 7, paragraph 1 of the Financial Market Supervision Act (FINMASA) requires FINMA's binding regulatory requirements to sit in a formally designated ordinance rather than in a supervisory circular. Circular 2015/2 has governed liquidity risk management at Swiss banks and securities firms for a decade, but its legal format no longer meets that standard.
By converting the circular's content into an ordinance, FINMA achieves what it calls "format compliance". The underlying liquidity risk framework does not change fundamentally, but the rules now carry the legal weight of an ordinance, making non-compliance a more clear-cut supervisory matter.
The Consultation Process
FINMA ran a public consultation on the draft LiqO-FINMA between 3 July 2025 and 29 September 2025. The majority of respondents welcomed the conversion. Objections were limited, and the substantive changes introduced as a result are narrow in scope, covering two specific areas rather than a broad rewrite of the liquidity risk regime.
What Actually Changes: The Two Substantive Areas
Most of the LiqO-FINMA text mirrors the existing circular. The meaningful changes cluster around two topics that emerged from the consultation and from the parallel update to the Federal Council's Liquidity Ordinance.
Notification Requirements During Liquidity Stress
The first change concerns the obligation to provide information when a liquidity shortage is either emerging or has already occurred. The new ordinance refines the conditions under which a bank or securities firm must report stress signals to FINMA and what that reporting must contain. For compliance and finance teams, this tightens the internal escalation path: the moment early-warning indicators are triggered, the clock on regulatory notification starts. Firms that relied on the looser, circular-based framing should review their incident escalation procedures against the ordinance text once it is published in full.
Liquidity and Financial Planning
The second change relates to forward-looking liquidity and financial planning requirements. Institutions will need to demonstrate that their planning processes satisfy the technical implementing provisions that FINMA will issue alongside the ordinance. This has a direct read-across to how finance and treasury functions document their liquidity forecasts and stress scenarios, and how that documentation is structured for audit purposes.
Both sets of changes are being incorporated into the Federal Council's own Liquidity Ordinance, which also enters into force on 1 January 2027. FINMA's LiqO-FINMA provides the technical implementation layer on top of that Federal Council instrument.
The Federal Council Layer: Understanding the Two-Tier Structure
Swiss financial regulation on liquidity now operates on two tiers from 1 January 2027. The Federal Council's Liquidity Ordinance sets the overarching framework and absorbs the substantive changes on notification and planning. The LiqO-FINMA sits below it, providing FINMA's technical implementing provisions. Accounting firms and CFOs advising Swiss banks need to track both instruments, not just one. A change at the Federal Council level will typically cascade into a corresponding update at the FINMA level, and vice versa.
What Happens to Circular 2015/2
Circular 2015/2 is repealed in full on 1 January 2027, the same date the LiqO-FINMA enters into force. There is no overlap period. Any internal policy, procedure, or compliance checklist that currently references Circular 2015/2 must be updated before that date. For firms that have cross-referenced the circular in their regulatory capital and liquidity documentation, this is a housekeeping task with a hard deadline.
Practical Implications for Swiss Banks and Securities Firms
The LiqO-FINMA is primarily a structural and technical update, but it lands at a moment when Swiss financial institutions are already managing a significant regulatory workload. The concurrent entry into force of the Federal Council's Liquidity Ordinance on the same date means the implementation window is shared across two instruments.
For Accounting and Audit Teams
The shift from a circular to an ordinance has a direct effect on how auditors and external reviewers assess liquidity risk compliance. Ordinances carry a higher legal status than FINMA circulars. A finding of non-compliance with an ordinance is categorically more serious than a deviation from a circular, both in terms of supervisory consequences and in terms of how it is characterised in an audit report. Firms whose audit committees receive regular regulatory compliance updates should add the LiqO-FINMA transition to their 2026 agenda.
Firms using crypto accounting software or digital asset accounting software to manage books for institutions with crypto or tokenised asset exposures should note that the LiqO-FINMA's liquidity planning requirements apply to the institution's full balance sheet. Any digital asset holdings counted as liquid assets or included in liquidity stress scenarios will need to satisfy the same documentation standards as traditional instruments.
For CFOs and Treasury Functions
Treasury teams need to map the LiqO-FINMA's planning provisions onto their existing liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) processes. The notification requirements around emerging liquidity shortages in particular call for a review of internal alert thresholds and the escalation chain from treasury to the board and then to FINMA. If those thresholds are currently calibrated to Circular 2015/2 language, they may need recalibration once FINMA publishes the full technical implementing provisions.
For Compliance Functions
Compliance officers should treat the transition date of 1 January 2027 as a policy refresh deadline. The specific actions include retiring any internal documents that cite Circular 2015/2 as the authority, substituting references to LiqO-FINMA and the Federal Council Liquidity Ordinance, and confirming that the new notification and planning obligations are embedded in the firm's risk and compliance frameworks. Given that FINMA's technical implementing provisions have not yet been published in final form, compliance teams should monitor FINMA's website for the full ordinance text and associated guidance.
Timeline at a Glance
| Date | Event |
|---|---|
| 3 July 2025 | FINMA consultation on draft LiqO-FINMA opens |
| 29 September 2025 | Consultation closes |
| 7 July 2026 | FINMA publishes final LiqO-FINMA |
| 1 January 2027 | LiqO-FINMA and Federal Council Liquidity Ordinance enter into force; Circular 2015/2 repealed |
Broader Context: FINMA's Regulatory Modernisation Drive
The LiqO-FINMA sits within a wider pattern of FINMA aligning its supervisory instruments with FINMASA's format requirements. Accounting firms and CFOs advising Swiss institutions will want to read this ordinance alongside FINMA's Banking Act revision and TBTF capital reform, which addresses the capital side of the prudential framework, and alongside FINMA's broader supervisory agenda for banks and DLT trading, which sets out the regulator's current risk priorities for institutions holding digital assets.
The format-compliance drive also signals that other FINMA circulars may follow a similar path to ordinance status in the coming years. Compliance and accounting teams with Swiss institutional clients should factor in the possibility of further circular-to-ordinance conversions when setting their regulatory monitoring calendars.
Frequently Asked Questions
What is the LiqO-FINMA?
LiqO-FINMA is the new FINMA Ordinance on the Liquidity of Banks and Securities Firms. It replaces FINMA Circular 2015/2 and enters into force on 1 January 2027, providing the technical implementing provisions beneath the Federal Council's Liquidity Ordinance.
Why is FINMA converting a circular into an ordinance?
Article 7, paragraph 1 of the Financial Market Supervision Act requires FINMA's binding rules to be set out in an ordinance rather than a circular. The conversion is a format-compliance step, though it does introduce substantive changes on notification and planning obligations.
What are the substantive changes in LiqO-FINMA compared with Circular 2015/2?
Two areas change materially: the requirements for notifying FINMA when a liquidity shortage is emerging or has occurred, and the standards for liquidity and financial planning. Both are also incorporated into the Federal Council's Liquidity Ordinance.
Does LiqO-FINMA apply to institutions holding crypto or tokenised assets?
The ordinance applies to the full balance sheet of in-scope banks and securities firms. Any digital asset holdings that are included in liquidity calculations or stress scenarios must meet the same documentation and reporting standards as traditional assets under the new instrument.
What should accounting firms do before 1 January 2027?
Firms should retire internal documents referencing Circular 2015/2, update compliance frameworks to cite LiqO-FINMA and the Federal Council Liquidity Ordinance, review notification escalation procedures against the new ordinance text, and monitor FINMA's publications for the final technical implementing provisions.
Source: FINMA