Financial Statements 2015 SIX Securities Services Ltd
Contents
4
Key figures
5 6 7 8 9 10
Consolidated Financial Statements 2015 Management report Consolidated balance sheet Consolidated income statement Consolidated cash flow statement Consolidated statement of changes in equity
11 11 12 15 16
Notes to the consolidated financial statements General information Risk management Regulatory disclosure Accounting and valuation policies
19 Information on the consolidated balance sheet 19 1. S ecurities financing transactions 20 2. C ollateral for loans, receivables and off-balance-sheet transactions as well as impaired loans and receivables 21 3. D erivative financial instruments 22 4. F inancial investments 22 5. F ully consolidated participations 23 6. Non-consolidated participations 23 7. Tangible assets 24 8. O ther assets and liabilities 24 9. A ssets pledged or assigned to secure own commitments 25 10. P ension funds 26 11. Value adjustments and provisions 27 12. B ank’s capital and significant shareholders 28 13. Transactions with related parties 29 14. Maturity structure of financial instruments 30 15. A ssets and liabilities by domestic and foreign origin 31 16. A ssets by country/group of countries 32 17. A ssets and liabilities by most significant currencies
33 Information on the consolidated income statement 33 18. R esult from trading activities 33 19. P ersonnel expenses 33 20. G eneral and administrative expenses 34 21. L osses and extraordinary items 34 22. Taxes 34 23. Negative interest
SIX Securities Services Ltd Consolidated Financial Statements 2015
35 Information on off-balance-sheet transactions 35 24. C ontingent assets and liabilities, credit commitments and subordinated assets and liabilities 35 25. F iduciary transactions
36
Report of the statutory auditor on the consolidated financial statements
39 40 41 42 43
SIX Securities Services Ltd financial statements 2015 Balance sheet Income statement Statement of changes in equity Appropriation of profit
44 Notes to the financial statements 44 1. A ccounting policies 44 2. F oreign currency conversion 44 3. A ssets held for sale 44 4. Investments in subsidiaries and other investments 44 5. R evenue recognition 45 6. Number of employees 45 7. C ash and cash equivalents 45 8. Trade receivables 45 9. O ther receivables 45 10. F inancial assets 46 11. Investments in subsidiaries and other investments 46 12. A ssets held for sale or participations in liquidation 46 13. Trade payables 46 14. O ther payables 47 15. O ther long-term liabilities 47 16. C ontingent liabilities 47 17. L iabilities from leasing contracts with maturity > 1 year 47 18. Net release of hidden reserves
48
Report of the statutory auditor on the financial statements
SIX Securities Services Ltd Consolidated Financial Statements 2015
Key figures
SIX Securities Services is a part of SIX. SIX operates Switzerland’s financial market infrastructure and offers comprehensive services around the world in the areas of securities trading, securities services, financial information and payment transactions. As a globally active infrastructure provider, the company is a key pillar of the Swiss financial center. SIX Securities Services is a leading, internationally active full service provider of clearing, settlement, risk management, securities custody and administration, and share register services. It provides the Swiss financial center and international markets with an efficient and largely automated infrastructure. CHF 1,000 Total assets Total liabilities Total equity Operating income Operating expenses Consolidated profit Cash flow from operating activities Cash flow from equity transactions Cash flow from investing activities Cash flow from banking operations Capital adequacy/solvency ratio Leverage ratio Liquidity coverage ratio (SIX SIS Ltd) Workforce (full-time equivalents) Number of settlement transactions (in 1,000) Number of clearing transactions (in 1,000) Deposit volume (in CHF million)
4
The management of all systemically important services of SIX are pooled together in the business area Securities Services. This includes the business units SIX x-clear Ltd, SIX SIS Ltd, SIX Repo (Collateral & Repo offerings), SIX SAG Ltd, and Swiss Interbank Clearing (SIC; the Swiss interbank payment system). Through these business units SIX Securities Services covers the entire post-trade transaction lifecycle.
2015
2014
5,806,868 5,356,234 450,633
7,041,947 6,597,182 444,765
226,414 –178,172 43,414
210,510 –162,369 43,223
65,331 –35,000 –4,398 –1,159,623
50,905 31,200 –23,306 1,177,644
52.8% 8.5% 133.1%
43.4% 6.5% 121.2%
388
376
31,124 409,395 3,135,874
27,883 343,496 3,203,418
SIX Securities Services Ltd Consolidated Financial Statements 2015
Consolidated Financial Statements 2015
5
SIX Securities Services Ltd Consolidated Financial Statements 2015
Management report
SIX Securities Services overcomes challenges to deliver continued growth SIX Securities Services delivered a strong per formance during a challenging year. Operating income in-creased by 7.6% to CHF 226 million. Reasons for this significant growth included increased volumes resulting from market volatility, new offerings and significant cost optimization.
In June 2015, SIX became the first major securities depository in Europe to join TARGET2-Securities (T2S), a major pan-European project. Being the first central securities depository from a non-EU country offers SIX clients direct access to the to the European Central Bank’s (ECB) newly created settlement platform. This ensures that cross-border securities transactions can be settled efficiently in central bank money.
SIX pools its systemically important securities services for the Swiss financial center into one business area. This mainly includes the legal entities SIX x-clear Ltd (central counterparty for clearing trades on the exchange) and SIX SIS Ltd (central securities depository), which are subject to supervision by the Swiss National Bank (SNB). In 2015, SIX took the decision to sell its share register management and annual general meetings business, and entered into negotiations with Computershare Ltd. The two parties aim to complete the sale in 2016.
Comprehensive commitment strengthens international scope SIX remains a market leader in terms of the reliability, stability and compliance of its systems and services; this reinforces the international reputation of the Swiss financial center. The annual international client survey carried out by Global Custodian Magazine, which looks at the quality of companies’ settlement, custody and asset servicing offerings, provides further confirmation of this. In 2015, SIX received top ratings in the Swiss market and as an international securities depository in six of the six categories.
Stability and interoperability encourage growth In key areas such as clearing, settlement and custody, SIX Securities Services grew organically. This growth was driven by the considerably higher number of clearing and settlement transactions in the first six months of the year as well as higher revenues from custody services. As a result of the stable performance of its systems, SIX was also able to pass the ultimate stress test in the post-trading space: the highest volumes in history on 15 January 2015 resulting from the SNB’s decision to abandon the minimum exchange rate for EUR/CHF.
In mid-November 2015, the European Commission recognized the equivalence of Switzerland’s supervi sory regime for central counterparties (CCPs). This decision ensures cross-border market access for SIX x-clear Ltd to the European Union, meaning that clients can also use the central counterparty of SIX to clear standardized OTC derivatives, as required under EU regulations. This recognition of equivalence allows SIX to process additional international business volumes via its infrastructure and thus benefit from economies of scale, which will, ultimately, make the Swiss financial center even more competitive.
Looking forward, SIX is to offer its clearing services in Northern Europe through the Norwegian branch of SIX x-clear and will be interoperable in Europe with EuroCCP and LCH.Clearnet.
6
SIX Securities Services Ltd Consolidated Financial Statements 2015
Consolidated balance sheet
CHF 1,000
Notes
31/12/2015
31/12/2014 1
3,264,990 1,240,233 1,029,112 25,707 64,306 134,408 980 1,457 36,304 9,372 5,806,868
4,398,681 1,272,902 901,832 42,131 70,059 309,955 5,006 1,704 33,846 5,831 7,041,947
4,520,802 408,438 261,351 65,393 37,315 48,081 14,854 26,000
6,006,932 163,256 251,411 70,758 32,519 42,048 30,258 26,000
34,910 197,771 153,512 –4,974 43,414 5,806,868
34,910 197,771 145,290 –2,428 43,223 7,041,947
34
26
Assets Liquid assets Amounts due from banks Amounts due from securities financing transactions Amounts due from customers Positive replacement values of derivative financial instruments Financial investments Accrued income and prepaid expenses Non-consolidated participations Tangible assets Other assets Total assets Liabilities and equity Amounts due to banks Liabilities from securities financing transactions Amounts due to customers Negative replacement values of derivative financial instruments Accrued expenses and deferred income Other liabilities Provisions Bank’s capital Retained earnings Legal reserves from retained earnings Other reserves Retained earnings Currency conversion reserve Consolidated profit for the year Total liabilities and equity Off-balance-sheet transactions Irrevocable commitments 1
1 2 3 4 6 7 8
3 8 11 12
2
Some prior-year items have been regrouped to match the required structure. See introduction to the accounting and valuation policies.
7
SIX Securities Services Ltd Consolidated Financial Statements 2015
Consolidated income statement
CHF 1,000
Notes
Interest and discount income Interest and dividend income from financial investments
2015
2014 1
–17,983
6,466
3,223
4,798
Interest expenses
25,830
–9,381
Gross income /result from interest operations
11,070
1,882
Changes in value adjustments for default risks
–89
–108
10,981
1,774
Result from interest operations
25
Commission income from clearing & settlement
248,301
233,456
Commission expenses from clearing & settlement
–69,364
–64,302
26,056
29,904
Commission income from other services Commission expenses from other services Result from commission business and services Result from trading activities
20
Income from participations of which from non-consolidated participations Other ordinary income Other ordinary expenses Result from other ordinary activities
–194
–253
204,798
198,805
–111
–20
1,266
222
1,266
222
9,493
9,732
–13
–3
10,745
9,951
Personnel expenses
21
–61,066
–57,231
General and administrative expenses
22
–117,106
–105,138
–178,172
–162,369
–2,188
–16,404
Operating expenses Changes in value adjustments on non-consolidated participations and depreciation of tangible assets Changes to provisions and other value adjustments, and losses
11
Operating result
11,247
27,359
57,301
59,096
Extraordinary income
23
83
14
Taxes
24
–13,970
–15,887
43,414
43,223
Consolidated profit for the year 1
Some prior-year items have been regrouped to match the required structure. See introduction to the accounting and valuation policies.
8
SIX Securities Services Ltd Consolidated Financial Statements 2015
Consolidated cash flow statement
CHF 1,000
Notes
2015
2014 1
Consolidated profit for the year
43,414
43,223
Depreciation of tangible assets
2,188
16,404
–11,695
–23,804
Cash flow from operating activities
Changes to provisions and other value adjustments, and losses
11
Changes in value adjustments for default risk and losses Deferred taxes Foreign currency conversion effect
89
1
–3,797
680
–2,546
–2,428
Amounts due from customers
2
16,424
11,979
Amounts due to customers
2
9,940
–13,190
Accrued income and prepaid expenses
4,026
–210
Accrued expenses and deferred income
4,796
8,712
Other assets
8
–3,541
38,447
Other liabilities
8
6,033
–28,909
65,331
50,905
Total cash flow from operating activities Cash flow from shareholders’ equity transactions Other transfers to reserves
–
32,700
Dividends paid
–35,000
–1,500
Total cash flow from shareholders’ equity transactions
–35,000
31,200
Cash flow from investing activities Disposals (investments) of non-consolidated participations
6
247
–
Disposals of participations
5
–
8,051
Investments in participations
5
–
–30,170
Tangible assets
7
–4,646
–1,187
–4,398
–23,306
Total cash flow from investing activities Cash flow from banking operations (short-term) Amounts due from banks Amounts due to banks
32,669
184,082
–1,486,130
1,519,556 –550,229
Amounts due from securities financing transactions
1
–127,280
Liabilities from securities financing transactions
1
245,182
15,437
Positive replacement values of derivative financial instruments
3
5,753
–61,209
Negative replacement values of derivative financial instruments
3
–5,365
63,631
Financial investments
4
175,547
6,376
Total cash flow from banking operations (short-term)
–1,159,623
1,177,644
Change in liquid assets
–1,133,691
1,236,444
Liquid assets as at 1.1.
4,398,681
3,162,237
Liquid assets as at 31.12.
3,264,990
4,398,681
1
Some prior-year items have been regrouped to match the required structure. See introduction to the accounting and valuation policies.
9
SIX Securities Services Ltd Consolidated Financial Statements 2015
Consolidated statement of changes in equity
CHF 1,000
Bank’s capital
Legal res. from ret. earnings
Other reserves
Retained earnings
Currency conversion reserve
Consolidated profit
Total
1 January 2015
26,000
34,910
197,771
145,289
–2,428
43,223
444,765
Appropriation of profit
43,223
Dividends
–43,223
–35,000
Currency conversion differences
– –35,000
–2,546
Consolidated profit
–2,546 43,414
43,414
31 December 2015
26,000
34,910
197,771
153,512
–4,974
43,414
450,633
1 January 2014 1
26,000
34,910
165,071
115,228
–
31,561
372,770
Appropriation of profit
31,561
Dividends
–1,500
Currency conversion differences
–31,561 –2,428
Other contributions
1
32,700
26,000
34,910
197,771
145,289
–2,428
Some prior-year items have been regrouped to match the required structure. See introduction to the accounting and valuation policies.
10
–2,428
32,700
Consolidated profit 31 December 2014 1
– –1,500
43,223
43,223
43,223
444,765
SIX Securities Services Ltd Consolidated Financial Statements 2015
Notes to the consolidated financial statements
General information SIX Securities Services Ltd is the parent company of the units SIX x-clear Ltd, SIX SIS Ltd, SIX SAG Ltd, SIX Systems Ltd, SIX SIS Nominee U.K. Ltd and Projekt gesellschaft Softwareentwicklung Oktober 2011 Ltd. As a wholly-owned subsidiary of SIX, it covers the securities services business field. The core business of SIX SIS Ltd is the settlement of securities transactions and the safe custody and administration of securities both in Switzerland and abroad. As the national central securities depository (CSD), SIX SIS Ltd is a key element of the Swiss Value Chain. It also offers global custody services. As a licensed bank under Swiss law, SIX SIS Ltd is super vised by the Swiss Financial Market Supervisory Authority (FINMA). Financial system supervision is performed by the Swiss National Bank. As a central counterparty (CCP), SIX x-clear Ltd provides clearing services for SIX Swiss Exchange Ltd, the London Stock Exchange and a number of multi lateral trading facilities (MTFs). In the prior year, it acquired a 100% participation in Oslo Clearing ASA. In the reporting year, all operational assets and liabilities
of Oslo Clearing ASA were fully transferred to SIX x-clear Ltd’s Norwegian branch and the legal entity Oslo Clearing ASA was liquidated. The branch operates as a central counterparty for equity market instruments, standardized financial derivatives listed and traded on Oslo Børs, OTC derivatives traded at Oslo Connect, and securities lending products. As a licensed bank under Swiss law, SIX x-clear Ltd is supervised by FINMA. Financial system supervision is performed by the Swiss National Bank. Furthermore, the Company has Recognized Overseas Clearing House (ROCH) status in the United Kingdom. At year-end 2015, SIX Securities Services had 387.9 employees on a full-time equivalent basis (year-end 2014: 376.2). SIX Securities Services has outsourced the operation and maintenance of the data center to SIX Group Services Ltd. This outsourcing arrangement is governed by service level agreements in compliance with FINMA regulations. Staff members of SIX Group Services Ltd are required to maintain banking secrecy.
Board of Directors Dr. Urs Rüegsegger Chairman of the Board of Directors Dr. Stefan Mäder Member of the Board of Directors Addresses SIX Securities Services Ltd Brandschenkestrasse 47 CH-8021 Zurich T +41 58 399 3111
[email protected]
SIX SIS Ltd Baslerstrasse 100 CH-4601 Olten T +41 58 399 3111
[email protected]
SIX Securities Services, London Office 15 Appold Street GB-London EC2A 2NE T +44 207 550 5447
SIX x-clear Ltd Brandschenkestrasse 47 CH-8021 Zurich T +41 58 399 4311
[email protected]
SIX SAG Ltd Baslerstrasse 100 CH-4601 Olten T +41 58 399 6100
[email protected]
SIX x-clear Norwegian Branch Tollbugata 2 NO-0051 Oslo T +47 23 17 96 00
[email protected]
Internet SIX Securities Services SIX Group
www.six-securities-services.com www.six-group.com
11
SIX Securities Services Ltd Consolidated Financial Statements 2015
Risk management General As a part of SIX, SIX Securities Services is an important pillar of the Swiss financial center, laying great emphasis on reliability and security, and creating the trust that is essential for the financial center’s smooth functioning. The Board of Directors of SIX approves the risk policy and delegates risk management tasks. The Board of Directors (BoD) of SIX Group decides on the risk appetite and the risk policy and delegates risk management tasks. The Risk Committee of the BoD of SIX Group is responsible for internal controls with respect to risk. Overall responsibility for risk management lies with the members of the Group Executive Board of SIX, which is supported at group level by the specialized units Corporate Development (for strategic risks), Corporate Security Officer (for security risks) and Compliance Officer and by the Finance and Services division. Risk control measures at SIX are executed by the Chief Risk Officer and the dedicated SIX Securities Services Risk Management Team, who are independent of the line management structure and form the “second line of defense”. Risk management and controlling are monitored by the internal auditors. The management of specific risks faced by SIX Securities Services is assumed by senior executives of SIX Securities Services, who form the “first line of defense”. Risk groups Strategic risk and project risk Strategic risks and project risks arise both from the implementation of SIX Securities Services strategy and from the implementation of the strategies of the individual subsidiaries. They are the responsibility of the Group Executive Board and of the Executive Boards of the subsidiaries. Strategic risks and project risks are reviewed semi-annually based on their risk profiles. Reputational risk Reputational risk involves the risk of the reputation of SIX or one of its subsidiaries being tarnished. As reputational risk is largely inherent in business activities, reputational risk management mainly consists of ensuring competency, integrity, responsibility and 12
compliance in business activities at a group level. Reputational risk management includes all operational and strategic management instruments of SIX and SIX Securities Services, in particular financial reporting, monitoring of key performance figures and surveys of customer and staff satisfaction. A well-established emergency organization system ensures that in the event of a crisis, reputational risks are kept to a minimum. Counterparty risk (default risk, credit risk) Credit risk, counterparty risk or default risk is defined as the danger of a loss caused by a counterparty not fulfilling its contractual obligations, i. e. a counterparty or a country becoming insolvent. This includes settle ment risk or the risk of the counterparty becoming insolvent at the time when the transaction is settled. SIX Securities Services applies a conservative risk and credit policy. New clients of SIX Securities Services are required to meet strict regulatory standards. Clients that are not subject to adequate financial institution and money laundering regulation and supervision are not accepted. Management is effected via limits granted to the clients by the relevant bodies within SIX pursuant to the competency rules. SIX Securities Services applies a risk-based approach for defining the periodicity of counterparty reviews and assigns every counterparty to a risk group. Counter parties in a higher risk group (high limits, poor ratings) are reviewed more often and are monitored more closely than those in a lower risk group. For the review, the development of the client’s business, its market standing and its relationship with SIX Securities Services are taken into account. The limit granted mainly depends on the client’s rating, or the collateral it provides. Limits are monitored constantly. SIX Securities Services is linked online and in real time with SIX Swiss Exchange and with the SIC/euroSIC systems. The system of real-time settlement of irreversible transactions on the basis of simultaneous delivery versus payment offers the best guarantee of eliminating settlement risk. This system does not function for cross-border securities transactions. The resulting receivables from and liabilities towards banks
SIX Securities Services Ltd Consolidated Financial Statements 2015
are subject to counterparty risk and – to a limited extent, i.e. in the case of counterparty default – also market risk. These risks, which are of extremely short duration, are strictly monitored through detailed procedures for managing limits. SIX Securities Services applies the Swiss standard approach during the transitional period in line with Basel III to calculate capital adequacy requirements for credit risks. Non-counterparty-related risk Non-counterparty-related risk is defined as the danger of a loss due to value changes or liquidation of assets that are not related to a specific counterparty. This category includes positions that concern the actual infrastructure for business activities. In particular, it includes office buildings, sundry tangible assets, software and other assets subject to depreciation. Non-counterparty-related risks are accounted for through adequate depreciation and insurance. In particular, software is fully depreciated in the year of production or purchase. Market risk Market risk is the risk of a loss due to value fluctuations of a position triggered by a change in the underlying factors (e.g. equity or commodity prices, exchange rates and interest rates and their respective volatilities). Interest rate risks SIX Securities Services does not engage in conventional credit business and does not enter into material medium-term or long-term fixed interest transactions. However, interest rate fluctuations resulting from short-term investments may influence the treasury result.
Foreign currency risk In principle, SIX Securities Services does not hold any foreign currency for its own account outside of OECD member states. In addition, all receivables from and liabilities towards clients and custodians are matched by currency. Currency risks are generally limited to the net amounts from interest received and paid, commissions and fees. Operational risk According to Basel III, operational risk is defined as “the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events”. The definition also covers all legal risks, including fines from supervisory bodies and settlements. However, strategic risks and reputational risks are excluded. To ensure reliability as a key pillar of the Swiss financial center, SIX Securities Services has implemented the systematic management of operational risks. Operational risk management is regulated in a frame work that defines all responsibilities and processes as well as the risk appetite and risk tolerance. The framework is based on the “Principles for the Sound Management of Operational Risk” issued by the Basel Committee on Banking Supervision and the “Principles for Financial Market Infrastructure” issued by CPMIIOSCO. The Board of Directors of SIX Securities Services conducts an annual review of the framework, which, in conjunction with the supporting directives, forms the basis for the management of operational risks. Operational risks are assessed by determining the potential damage. The direct financial loss is calculated, then the potential future financial impact in terms of a loss of customer trust and reputational risks is also taken into account. Any risks identified and cases of damage, along with the losses incurred, are tracked in a database and linked to the internal control system in order to systematically identify risks and support ongoing risk assessment.
13
SIX Securities Services Ltd Consolidated Financial Statements 2015
Operational risk management is a task assumed at all management levels. Operational risks are limited by means of internal regulations and directives on organization and control. These allow operational risks to be tracked and reduced through systematic risk controls. These risk controls include a mechanism that enables the risk management team to identify and eliminate risks before they actually occur. As a second line of defense, the risk management team also considers instruments to reduce the effective risks. In an annual assessment, all departments evaluate the appropriateness and operational effectiveness of the internal control system and adapt it where necessary. Business processes are reviewed continuously by the risk management team to identify and assess potential risks. The team also defines measures to further decrease operational risks. The risks identified and measures defined to minimize the risks are regularly reported to the Board of Directors and the management of SIX Securities Services. Business process risks are also systematically assessed by the internal audit department and adequate measures are implemented. Together with the legal department, the SIX compliance function ensures that the business activities of SIX Securities Services comply with the current rules and regulations and the general obligation of a financial intermediary to exercise due diligence. These entities are responsible for implementing the requirements and developments defined by supervisory bodies, the legislator, the jurisdiction and other relevant institutions.
14
The risk inherent in relying on information technology is addressed by SIX Securities Services business continuity planning, which is in line with customary industry practice and measures aimed at reducing the probability of such failures occurring, such as by maintaining an IT back-up center. Corresponding measures on the part of our outsourcing partners are subject to contractual agreements. Business contingency management is tested annually to ensure its efficiency. The results of this testing is reported to the Board of Directors and the management of SIX Securities Services. Improvement measures are also summarily approved by the Board of Directors and the management. SIX Securities Services is also supervised by the Swiss National Bank in this respect pursuant to the National Bank Act. Operational risks are backed with capital according to the basic indicator approach under Basel III.
SIX Securities Services Ltd Consolidated Financial Statements 2015
Regulatory disclosure In accordance with FINMA circular 08/22, margin notes 7–11, SIX Securities Services meets the requirements for partial disclosure. Capital adequacy As SIX Securities Services does not offer common credit services, some of the disclosure requirements are redundant and therefore obsolete (i.e. capital ratios for non-CET1 capital). CHF 1,000 Eligible capital (CET1 only) Required capital thereof for credit risks thereof for non-counterparty-related risks thereof for market risks thereof for operational risks Capital ratio (CET1 ratio)
31/12/2015
31/12/2014
406,860
400,592
61,672
73,822
24,666
38,512
7,179
7,086
324
1,212
29,503
27,012
52.8%
43.4%
The required capital shown above is calculated as 8% of risk-weighted assets. The regulatory minimum capital requirement is 10.5% of risk-weighted assets. Leverage ratio CHF 1,000
31/12/2015
31/12/2014
Eligible capital
406,860
400,592
Total exposure
4,777,554
6,140,083
Leverage ratio
8.5%
6.5%
Liquidity coverage ratio (LCR) Only SIX SIS Ltd is required to fulfill the LCR. Therefore, the figures below show SIX SIS Ltd’s LCR. The values presented are quarterly averages.
CHF 1,000/in %
High-quality liquid assets
Net outflow
LCR
Quarter ended 31 December 2014
3,625,829
2,991,523
121%
Quarter ended 31 March 2015
3,455,652
3,268,665
106%
Quarter ended 30 June 2015
2,767,010
2,123,356
130%
Quarter ended 30 September 2015
3,161,209
2,008,992
157%
Quarter ended 31 December 2015
2,637,817
1,982,276
133%
15
SIX Securities Services Ltd Consolidated Financial Statements 2015
Accounting and valuation policies All amounts shown in the financial statements have been rounded. The totals may therefore deviate from the sum of the individual values. These financial statements have been prepared for the first time in accordance with FINMA circular 2015/01 “Accounting rules for banks” (ARB). Therefore, some prior-year balance sheet and income statement items have been regrouped to match the required structure. There were no changes in valuation, including prioryear financials. General principles The accounting, reporting and valuation principles for the individual companies comply with the provisions of the Swiss Code of Obligations (CO), the accounting rules of the Swiss banking ordinance and the accounting rules for banks of the Swiss Financial Market Super visory Authority (ARB FINMA). As the entire group is supervised by FINMA, the financial statements of the group have also been consolidated in line with the accounting principles of the Swiss banking legislation. SIX Securities Services applies the true and fair view principle in the consolidated financial statements. In general, business transactions are recorded using the trade date accounting principle. Non-fulfilled trans actions from the clearing and settlement business are an exception to this and are accounted for using the settlement date accounting principle. EUR Unit
Detail positions reported under a specific balance sheet item are valued item-by-item. Scope and method of consolidation The consolidated financial statements comprise all transactions of SIX Securities Services Ltd and its directly and indirectly held subsidiaries (more than 50% share of voting capital). Consolidation is carried out in accordance with the purchase method. In principle, participations of between 20% and 50% are recognized in line with the equity method. Participations under 20% are held at the lower of cost or market value. The effects of intragroup transactions and profits are eliminated when preparing the consolidated financial statements. Foreign currency conversion Transactions in foreign currencies are posted at the current exchange rates. Balance sheet items in foreign currencies are converted into Swiss francs at the exchange rates applicable on the balance sheet date if no historical valuation is applicable (i.e. participations). Exchange rate gains or losses are credited or debited to the income statement. Financial statements in foreign currencies are converted at the exchange rates applicable on the balance sheet date.
USD
GBP
JPY
NOK
CAD
1
1
1
100
100
1
Exchange rate as at current year-end
1.08
0.99
1.47
0.82
11.26
0.71
Exchange rate as at prior year-end
1.20
0.99
1.54
0.83
13.32
0.85
Liquid assets These balance sheet items are shown at their nominal value. Amounts due to and from banks and customers Receivables and liabilities in Swiss francs are recorded at their nominal values. Risks arising in respect of customer claims are taken into account by offsetting 16
a value adjustment against the respective asset. Predictable risks of loss are accounted for through individual value adjustments and latent risks through collective value adjustments calculated on the basis of clearly defined rates. Receivables from and liabilities towards banks arise mainly from clearing and settlement activities by SIX x-clear Ltd and SIX SIS Ltd with banks and financial organizations in Switzerland and abroad.
SIX Securities Services Ltd Consolidated Financial Statements 2015
Amounts due from and liabilities from securities financing transactions In accordance with the accounting guidelines, the sub stance over form principle applies for securities lending and repurchase transactions. Thus non-monetary values are shown in the balance sheet of the party delivering these values.
Securities lending and borrowing SIX Securities Services lends and borrows nonmonetary instruments such as money market papers and securities for its own account and risk (principal status). It generally only engages in trading-book transactions, whereby receivables and liabilities arising from the lending or borrowing of non-monetary instruments are valued at market value. Lending transactions in securities or money market papers are treated like repurchase agreements, provided they are covered by cash collateral and subject to daily margining. Lending transactions in securities or money market papers that are not covered by cash collateral are not included in the balance sheet, but disclosed in the notes. Fees paid and received are shown under commission income. Repurchase and reverse repurchase agreements Repurchase agreements are shown in the balance sheet as cash deposits against pledge of own securities. Reverse repurchase agreements are treated as loans covered by securities collateral. This emphasizes the nature of such transactions as financing instruments. The transfer of securities is treated as if the securities had been pledged as collateral to cover the loan. Fees paid and received are shown under commission income.
Positive and negative replacement values of derivative financial instruments SIX Securities Services does not engage in trading activities on its own account. The replacement values represent the market value of all open positions of all clearing members on the balance sheet date (after end-of-day netting) and are therefore measured at fair value. From an accounting perspective, the open positions are to be classified as “trading instruments” because of SIX x-clear Ltd’s principal status. Although further netting would be possible, this position is voluntarily presented gross on the balance sheet for transparency reasons. The unrecognized netting potential is disclosed in note 3. Non-consolidated participations Participations that are not fully consolidated are valued according to the principles set out in the section “Scope and method of consolidation”. Non-consolidated par ticipations are valued according to their acquisition cost. Financial investments Financial investments are stated at the lower of cost or market value. Bonds pledged as collateral (see note 9) are valued on the basis of the accrual principle, with the premium arising on purchase being amortized over the term to maturity. In the case of premature sales, realized gains and losses are deferred according to the original maturity of the instruments. Value adjustments resulting from changes in the issuer’s credit standing are immediately recognized by offsetting against the respective asset. Tangible assets Tangible assets are shown in the balance sheet at cost less necessary depreciation. Depreciation is calculated using the straight line method. All tangible assets are regularly assessed with respect to a possible impair ment of their value.
17
SIX Securities Services Ltd Consolidated Financial Statements 2015
Asset class
Estimated lifetime
Depreciation rate
Installations
7
14%
Furnishings and equipment
5
20%
Vehicles
5
20%
Hardware
5
20%
Buildings and building installations Real estate
35
3%
not depreciated
0%
SIX Securities Services does not report any intangible assets. In accordance with the ARB, software is included in the balance sheet item “Tangible assets” but disclosed separately in note 7.
Provisions Flat-rate provisions are created to cover latent defaults in the area of short-term financing used to guarantee settlement of securities transactions. These provisions depend on the balances as at the balance sheet date. Operational risks are covered by appropriate provisions. The calculation is made on the basis of the effective operational risks. Further provisions are created on the basis of the expected resource outflow. Changes since the previous year are recognized in the income statement. Pension benefit obligations Pension benefit obligations are treated according to Swiss GAAP FER 16. Other assets and liabilities Other assets and other liabilities are shown at their nominal value.
18
Off-balance-sheet transactions Off-balance-sheet transactions requiring disclosure concern irrevocable commitments and fiduciary bank accounts. Taxes Current taxes for the year under review are reported on an accrual basis. The tax implications resulting from time differences between the balance sheet items recorded in the consolidated financial statements and their taxable values in the individual financial statements are recorded as provisions for deferred taxes. Changes in provisions for deferred taxes are included in tax expenses, but disclosed separately in note 24.
SIX Securities Services Ltd Consolidated Financial Statements 2015
Information on the consolidated balance sheet
1. Securities financing transactions CHF 1,000
31/12/2015
31/12/2014
Book value of receivables from cash collateral delivered in connection with securities borrowing and reverse repurchase transactions 1 Book value of obligations from cash collateral received in connection with securities lending and repurchase transactions 1 Book value of securities lent in connection with securities lending or delivered as collateral in connection with securities borrowing as well as securities in own portfolio transferred in connection with repurchase agreements with unrestricted right to resell or pledge
1,029,112
901,832
238,062
–
38,442
89,573
38,442
89,573
Fair value of securities received and serving as collateral in connection with securities lending or securities borrowed in connection with securities borrowing as well as securities received in connection with reverse repurchase agreements with an unrestricted right to resell or repledge of which repledged securities
1,240,094
1,145,617
of which resold securities 1
237,266
200,010
175,441
175,932
31/12/2015
31/12/2014
Before netting agreements
Breakdown by transaction type CHF 1,000 Reverse repurchase agreements
1,029,112
901,832
Total amounts due from securities financing transactions
1,029,112
901,832
Repurchase agreements
238,062
–
Securities borrowing transactions
170,376
163,256
Total liabilities from securities financing transactions
408,438
163,256
19
SIX Securities Services Ltd Consolidated Financial Statements 2015
2. Collateral for loans, receivables and off-balance-sheet transactions as well as impaired loans and receivables CHF 1,000
31/12/2015
31/12/2014
25,951
42,286
Amounts due from customers Amounts due from customers (unsecured, before netting with value adjustments) of which impaired
244
155
Total before offsetting with value adjustments
25,951
42,286
Total after offsetting with value adjustments
25,707
42,131
34
26
Off-balance-sheet transactions Irrevocable commitments (unsecured)
SIX Securities Services does not offer common credit services. Therefore, all amounts from customers are uncovered. The irrevocable commitments are towards the depositor protection scheme under the Swiss Banking Act.
20
SIX Securities Services Ltd Consolidated Financial Statements 2015
3. Derivative financial instruments Trading instruments
CHF 1,000
Positive replacement values
Negative replacement values
Contract volumes
877
1,448
237,702
Interest rate-related instruments Forward contracts Equity securities and indices Forward contracts
40,563
41,080
7,033,569
Options (exchange-traded)
22,848
22,848
1,101,477
17
17
1,075
Total before netting agreements
64,306
65,393
8,373,822
Previous year
399,577
400,276
9,229,569
Options (OTC)
Recognized netting agreements
–
–
–
Total after recognized netting agreements
64,306
65,393
8,373,822
Previous year
70,059
70,758
9,229,569
Unrecognized netting agreements
–31,154
–31,154
–
Total after netting agreements
33,151
34,239
8,373,822
Previous year
51,479
52,178
9,229,569
The derivative instruments shown are unsettled spot transactions arising from the clearing business with bonds, equity and options that are recognized according to the settlement date accounting principle. No derivative
transactions were carried out for own purposes (i.e. hedging). No internal model was used to calculate the fair values of the derivative financial instruments.
Breakdown by counterparty CHF 1,000 Positive replacement values (after netting agreements)
Central clearing houses
Banks
Total
7,489
25,662
33,151
21
SIX Securities Services Ltd Consolidated Financial Statements 2015
4. Financial investments 31/12/2015 CHF 1,000 Debt securities of which intended to be held to maturity
31/12/2014
Book value
Fair value
Book value
Fair value
62,829
62,867
225,488
228,168
62,829
62,867
225,488
228,168
62,829
62,867
225,488
228,168
71,580
71,580
84,468
84,468
–
–
–
–
134,408
134,447
309,955
312,636
62,829
62,867
225,488
228,168
Breakdown by counterparty-rating AAA to AA– Equity securities of which qualified participations Total financial investments of which eligible for repurchase transactions in accordance with liquidity requirements
The rating categories presented above are based on Standard & Poor’s rating scale.
5. Fully consolidated participations in CHF million SIX x-clear Ltd, Zurich SIX SIS Ltd, Olten
Company capital
Share of capital
Share of vote
Ownership type direct
Clearing
CHF 30
100%
100%
Settlement/custody
CHF 26
100%
100%
direct
Share register
CHF 0.1
100%
100%
direct
SIX SAG Ltd, Olten SIX Systems Ltd, Olten SIX SIS Nominee U.K. Ltd, Olten Proj. Softwareentw. Oktober 2011 AG, Frankfurt
Oslo Clearing ASA, Oslo, was liquidated after business operations were fully transferred to SIX x-clear Ltd’s Norwegian branch. Oslo Clearing ASA had been fully consolidated since its acquisition.
22
Business activity
Inactive
CHF 2.5
100%
100%
direct
Nominee
CHF 0.1
100%
100%
indirect
Inactive
EUR 0.05
100%
100%
direct
SIX SIS International Ltd, Zurich, was sold to another subsidiary of SIX Group in 2015. There was no profit or loss arising from this transaction. SIX SIS International Ltd had been fully consolidated in prior years.
SIX Securities Services Ltd Consolidated Financial Statements 2015
6. Non-consolidated participations CHF 1,000
31/12/2015
31/12/2014
1,704
1,704
Acquisition cost Accumulated value adjustments
–
–
1,704
1,704
Additions
36
–
Disposals
–283
Book value as at current year-end
1,457
Book value as at previous year-end
1,704
The non-consolidated participations are insignificant shares. These investments have no market value, and the shares are not listed.
7. Tangible assets CHF 1,000 Bank buildings
Acquisition cost
Accumulated depreciation
Book value 31/12/2014
Additions
Disposals
Depreciation
2015 Total as at 31/12/2015 35,808
112,381
–79,615
32,766
4,759
–
–1,718
Installations and furnishings
3,841
–3,712
129
–
–60
–36
34
Software
1,147
–197
950
–
–53
–435
462
Other assets Total tangible assets
9
–9
–
–
–
–
–
117,379
–83,533
33,846
4,759
–113
–2,188
36,304
As at the year-end, there were no open leasing contracts (prior year: none).
During the second quarter of 2015, management committed to a plan to sell a bank building. The sale contract was signed in November 2015, and the transaction was closed in January 2016.
23
SIX Securities Services Ltd Consolidated Financial Statements 2015
8. Other assets and liabilities Other assets CHF 1,000
Other liabilities
31/12/2015
31/12/2014
31/12/2015
31/12/2014
SECOM settlement accounts
7,243
1,848
12,521
7,361
Indirect taxes
1,331
1,200
28,700
32,109
Compensation account
697
–
–
257
Sundry assets and liabilities
101
2,783
6,860
2,321
9,372
5,831
48,081
42,048
Book value
31/12/2015 Eff. committed
Book value
31/12/2014 1 Eff. committed
62,829
–
225,488
–
Total
9. Assets pledged or assigned to secure own commitments CHF 1,000 Financial investments 1
restated
The assets were pledged by SIX x-clear Ltd to cover inter-CCP risks. The balance sheet item “Amounts due from securities financing transactions” contains reverse repurchase agreements (see section “Amounts due to and from securities financing transactions” in the
24
accounting and valuations policies). Some securities received through these transactions were repledged, but are excluded from the above table. Details are disclosed in note 1.
SIX Securities Services Ltd Consolidated Financial Statements 2015
10. Pension funds Employer contribution reserves CHF 1,000 Nominal value as at previous year-end – transfer to other group entities – withdrawal – creation Nominal value as at current year-end of which with waiver of use Value adjustments offset Net value as at current year-end
The influence of employer contribution reserves on per sonnel expenses was CHF 0 (previous year: CHF 4,029 thousand). Economic benefit from surplus cover and pension fund expenses SIX Securities Services is connected to the pension fund of SIX Group. The coverage ratio of the Occupational Benefits Foundation of SIX was 118.7% as at the last audited financial statements (2014). SIX Securities Services does not gain any economic benefits in the
Note
11
31/12/2015
31/12/2014
11,173 – – 126 11,299 11,299 –11,299 –
19,143 –4,038 –3,932 – 11,173 11,173 –11,173 –
event of surplus cover. SIX Securities Services offers defined contribution plans. As at the balance sheet date, SIX Securities Services had no liabilities in excess of the regulatory contributions. The Occupational Benefits Foundation of SIX does not hold any equity instruments of SIX Securities Services. Pension fund expenses amounted to CHF 4,948 thousand in the current year (previous year: CHF 5,603 thousand).
25
SIX Securities Services Ltd Consolidated Financial Statements 2015
11. Value adjustments and provisions
CHF 1,000 Provisions for default risks
Balance at 31/12/2014
Use in conf. with designated purpose
New creations charged to income
Releases to income
Balance at 31/12/2015 2,783
2,599
–
936
–752
Provisions for operational risks
11,940
–444
422
–11,740
178
Provisions for deferred taxes 1
12,397
–
–
–3,797
8,600
Provisions for legal risks
1,878
–
122
–
2,000
Other provisions
1,444
–
–
–150
1,294
Total provisions
30,258
–444
1,480
–16,440
14,854
Offset value adjustments
11,328
–
215
–
11,543
1
New Creations and releases are charged to tax expenses
Provisions for default risks depend on the balances as at the balance sheet date according to the following rates: Account type
31/12/2015
31/12/2014
0.25% 0.15% 1.00% 0.20%
0.25% 0.15% 1.00% 0.20%
Nostro accounts Placements (investments/receivables from third-party banks) Short-term interim financing granted to clients on an unsecured basis Short-term interim financing granted to clients on a secured basis
Provisions for operational risks are calculated on the basis of actual operational risks. Value adjustments are created for defaulting debtors (see note 2) and employer contribution reserves with waiver of use (see note 7).
26
SIX Securities Services Ltd Consolidated Financial Statements 2015
12. Bank’s capital and significant shareholders Number of shares
Total nominal value
Capital eligible for dividend
Bank’s capital at previous year–end
260
26,000
26,000
Bank’s capital at current year–end
260
26,000
26,000
1,000 Units/CHF 1,000
All registered shares, and therefore all voting rights (1 share = 1 vote) of SIX Securities Services Ltd are held by its parent company, SIX Group Ltd. The share capital is fully paid in. As there is no capital increase planned, no authorized or conditional capital exists. Approximately 140 banks hold shares in SIX Group Ltd, but no bank holds more than 20% of SIX Group’s total equity. The shares are widely distributed, i.e. no single owner or bank category has an absolute majority.
All shareholders are bound by a shareholders’ agreement. Therefore, no securities are held by executives, directors or employees. Furthermore, no employee participation scheme is in place. The legal reserves below 50% of the nominal share capital are not freely distributable and may only be used to cover losses. The single-entity financial statements of SIX Securities Services Ltd according to commercial law can be found at the end of this document.
Shareholders with more than 5% of all voting rights in SIX Group Ltd 31/12/2015 CHF 1,000/in %
Nominal value
% of equity
31/12/2014 Nominal value
% of equity
UBS AG consolidated
3,380
17.3%
3,380
17.3%
Credit Suisse Group consolidated
2,500
12.8%
2,500
12.8%
Raiffeisen Group consolidated
1,344
6.9%
1,094
5.6%
27
SIX Securities Services Ltd Consolidated Financial Statements 2015
13. Transactions with related parties All transactions with related parties and other entities of SIX Group are conducted at prices in line with the market (“at arm’s length”). Assets CHF 1,000 SIX Group Ltd Other companies of SIX Group Qualified indirect shareholders
Liabilities
31/12/2015
31/12/2014
31/12/2015
31/12/2014
13,304
13,304
294,237
288,906
1,926
2,085
18,057
17,333
116,273
127,355
1,275,781
1,390,250
Shareholders of SIX Group Ltd with more than 10% of all voting rights are considered as qualified indirect shareholders. There were no transactions with members of governing bodies. During the reporting period the following transactions were conducted with SIX Group and its group companies: 2015 CHF 1,000/in % Result from interest operations
CHF
2014
% of item
CHF
% of item
945
8.6%
–3,710
–209.1%
Result from commission business and services
–120
–0.1%
–546
–0.3%
Result from other ordinary activities
7,645
71.2%
7,664
77.0%
Operating expenses
–92,535
51.9%
–76,767
47.3%
Total income from and expenses to SIX Group
–84,065
28
–73,358
SIX Securities Services Ltd Consolidated Financial Statements 2015
14. Maturity structure of financial instruments Due < 3 months
Due 3–12 months
Due 12–60 months
Total
–
–
–
–
3,264,990
–
247,475
–
–
1,240,233
–
–
1,029,112
–
–
1,029,112
Amounts due from customers
25,707
–
–
–
–
25,707
Positive repl. values of derivative financial instruments
64,306
–
–
–
–
64,306
Financial investments
71,541
–
11,251
51,616
–
134,408
1,457
–
–
–
–
1,457
Total financial assets
4,420,758
–
1,287,838
51,616
–
5,760,212
Previous year
5,922,280
CHF 1,000
At sight
Cancellable
3,264,990 992,758
Financial assets Liquid assets Amounts due from banks Amounts due from securities financing transactions
Non-consolidated participations
1,003,317
6,925,597
Financial liabilities Amounts due to banks
4,520,802
–
–
–
–
4,520,802
–
–
408,438
–
–
408,438
261,351
–
–
–
–
261,351
65,393
–
–
–
–
65,393
Total financial liabilities
4,847,546
–
408,438
–
–
5,255,985
Previous year
6,416,881
180,000
Liabilities from securities financing transactions Amounts due to customers Negative repl. values of derivative financial instruments
6,596,881
29
SIX Securities Services Ltd Consolidated Financial Statements 2015
15. Assets and liabilities by domestic and foreign origin 31/12/2015 CHF 1,000
31/12/2014
Domestic
Foreign
Total
Domestic
Foreign
Total
Assets Liquid assets
2,721,322
543,668
3,264,990
3,576,922
821,759
4,398,681
Amounts due from banks
274,491
965,742
1,240,233
239,459
1,033,443
1,272,902
Amounts due from securities financing transactions
791,917
237,195
1,029,112
297,030
604,802
901,832
Amounts due from customers
25,369
338
25,707
41,884
248
42,131
Positive repl. values of derivative financial instruments
38,939
25,366
64,306
22,847
47,212
70,059
Financial investments
71,541
62,867
134,408
173,579
136,377
309,955
980
–
980
4,391
615
5,006
–
1,457
1,457
–
1,704
1,704
35,841
462
36,304
32,891
955
33,846
Accrued income and prepaid expenses Non-consolidated participations Tangible assets Other assets
9,372
–
9,372
5,831
–
5,831
Total assets
3,969,772
1,837,095
5,806,868
4,394,833
2,647,114
7,041,947
Liabilities and equity Amounts due to banks
2,904,341
1,616,461
4,520,802
4,025,710
1,981,222
6,006,932
Liabilities from securities financing transactions
192,018
216,420
408,438
–
163,256
163,256
Amounts due to customers
261,350
1
261,351
206,153
45,258
251,411
Negative repl. values of derivative financial instruments
40,012
25,382
65,393
23,450
47,308
70,758
Accrued expenses and deferred income
37,315
–
37,315
29,688
2,831
32,519
Other liabilities
23,472
24,609
48,081
42,048
–
42,048
Provisions
14,854
–
14,854
30,258
–
30,258
Bank’s capital
26,000
–
26,000
26,000
–
26,000
34,910
–
34,910
34,910
–
34,910
Retained earnings Legal reserves from retained earnings
–
–
Other reserves
197,771
–
197,771
197,771
–
197,771
Retained earnings
153,512
–
153,512
145,290
–
145,290 –2,428
Currency conversion reserve
–4,974
–
–4,974
–2,428
–
Consolidated profit for the year
43,414
–
43,414
43,223
–
43,223
3,923,995
1,882,873
5,806,868
4,802,071
2,239,876
7,041,947
Total liabilities and equity
30
SIX Securities Services Ltd Consolidated Financial Statements 2015
16. Assets by country/group of countries 31/12/2015 Rating Europe
31/12/2014
CHF 1,000
Share in %
CHF 1,000
Share in % 93.3%
5,089,618
87.6%
6,566,818
Switzerland
AAA
3,969,775
68.4%
4,324,235
61.4%
Germany
AAA
562,744
9.7%
887,452
12.6% 2.9%
France
AAA
16,159
0.3%
206,098
United Kingdom
AAA
83,718
1.4%
126,314
1.8%
Denmark
AAA
255,363
4.4%
226,612
3.2%
Finland
AAA
60
0.0%
421,861
6.0%
Luxembourg
AAA
77,244
1.3%
159,896
2.3%
Norway
AAA
124,555
2.1%
214,350
3.0% 1.8%
North America
388,721
6.7%
123,935
United States
AAA
233,765
4.0%
76,797
1.1%
Canada
AAA
154,956
2.7%
47,138
0.7%
Australia
AAA
145,080
2.5%
103,722
1.5%
39,627
0.7%
91,800
1.3%
39,627
0.7%
91,800
1.3%
Asia Japan Other countries 1 Total assets 1
AAA n/a
143,821
2.5%
155,672
2.2%
5,806,868
100.0%
7,041,947
100.0%
None of the countries included in this category has a share of more than 1%.
Because SIX Securities Services does not offer common credit services, but needs to reliably satisfy settlement counterparties, the distribution of the assets
by country originates from a liquidity point of view. The risk domicile does not deviate from the assets’ domicile shown above.
Assets by country rating 31/12/2015
AAA – AA
31/12/2014
CHF 1,000
Share in %
CHF 1,000
Share in %
5,794,947
99.8%
7,028,941
99.8%
A
2,138
0.0%
1,313
0.0%
BBB
7,699
0.1%
8,434
0.1%
BB – B
2,079
0.0%
3,352
0.0%
below B Total assets
5
0.0%
2
0.0%
5,806,868
100.0%
7,042,042
100.0%
The rating categories presented above are based on the rating scale of Swiss Export Risk Insurance (SERV).
31
SIX Securities Services Ltd Consolidated Financial Statements 2015
17. Assets and liabilities by most significant currencies CHF 1,000
CHF
EUR
USD
GBP
NOK
Other 1
Total
Assets Liquid assets
2,721,261
543,729
–
–
–
–
3,264,990
Amounts due from banks
192,210
66,289
554,276
133,695
60,722
233,041
1,240,233
Amounts due from securities financing transactions
158,000
–
871,112
–
–
–
1,029,112
Amounts due from customers
25,707
–
–
–
–
–
25,707
Positive repl. values of derivative financial instruments
38,939
–
–
–
25,366
–
64,306
Financial investments
20,970
42,689
2,914
277
62,829
4,730
134,408
980
–
–
–
–
–
980
–
1,457
–
–
–
–
1,457 36,304
Accrued income and prepaid expenses Non-consolidated participations Tangible assets
35,841
–
–
–
462
–
Other assets
2,121
4,973
–
93
–
2,185
9,372
Total assets
3,196,029
659,136
1,428,302
134,064
149,380
239,956
5,806,868
2,376,069
315,369
1,327,893
137,349
128,614
235,509
4,520,802
–
333,812
64,067
365
5,925
4,269
408,438
259,689
1,570
60
15
17
1
261,351
Neg. repl. values of derivative financial instruments
40,012
–
–
–
25,382
–
65,393
Accrued expenses and deferred income
37,159
–
–
–
156
–
37,315
Other liabilities
11,048
328
36,618
82
–
5
48,081
Provisions
14,854
–
–
–
–
–
14,854
Bank’s capital
26,000
–
–
–
–
–
26,000
Liabilities and equity Amounts due to banks Liabilities from securities financing transactions Amounts due to customers
Retained earnings Legal reserves from retained earnings
34,910
–
–
–
–
–
34,910
Other reserves
197,771
–
–
–
–
–
197,771
Retained earnings
153,512
–
–
–
–
–
153,512
Currency conversion reserve
–4,974
–
–
–
–
–
–4,974
Consolidated profit for the year
43,414
–
–
–
–
–
43,414
3,189,464
651,078
1,428,638
137,811
160,093
239,784
5,806,868
6,565
8,058
–336
–3,746
–10,714
173
–
–9,763
9,305
–455
–3,662
3,452
1,123
–
Total liabilities and equity Net position per currency Previous year 1
None of the currencies included in the category “Other” has a share of more than 1% of the assets.
There were no material forex transactions for own purposes as at the balance sheet date (same as previous year).
32
SIX Securities Services Ltd Consolidated Financial Statements 2015
Information on the consolidated income statement
18. Result from trading activities CHF 1,000
2015
2014
Net valuation result from the conversion of foreign exchange positions
–111
–20
Total result from trading activities
–111
–20
2015
2014
19. Personnel expenses CHF 1,000 Salaries (incl. bonuses)
–48,470
–45,459
Social insurance benefits
–9,229
–8,867
Other personnel expenses
–3,367
–2,906
Total personnel expenses
–61,066
–57,231
2015
2014
SECOM expenses, cost of equipment
–53,649
–44,847
Consultancy and other services
–44,057
–42,608
–692
–947
of which for auditing services
–335
–475
of which for other services
–357
–472
Cost of premises
–5,140
–6,430
Advertising and marketing expenses
–3,994
–3,470
Indirect taxes and other fees
–1,820
–1,849
Other operating expenses
–7,753
–4,987
–117,106
–105,138
20. General and administrative expenses CHF 1,000
Audit fees
Total general and administrative expenses
33
SIX Securities Services Ltd Consolidated Financial Statements 2015
21. Losses and extraordinary items In the reporting year, equity instruments disclosed as participations were sold. This transaction resulted in extraordinary income of CHF 83 thousand.
Furthermore, bad debts of CHF 16 thousand had to be written off. These are included in the position “Changes in other value adjustments and provisions, and losses”.
22. Taxes CHF 1,000
2015
Income (expenses) for taxes in previous years Expenses for current taxes Expenses for deferred taxes
2014
571
–1,303
–18,036
–14,064
3,495
–520
–13,970
–15,887
Weighted average tax rate on operating result
31.5%
23.8%
Weighted average tax rate on operating result incl. changes of provisions for deferred taxes
25.4%
24.7%
Total taxes
The income from changes of provisions for deferred taxes is due to a substantial release of hidden reserves (provisions) by SIX SIS Ltd.
23. Negative interest According to the accounting rules for banks (ARB FINMA), negative interest paid is to be offset against interest income, while negative interest received is to be offset against interest expenses. In the reporting year, negative interest paid amounted to CHF 15,382 thousand (prior year: CHF 0), while negative interest
received amounted to CHF 20,704 thousand (prior year: CHF 0). The following table shows the result from interest operations as if negative interest paid was included in the position “Interest expenses” and interest received was included in the position “Interest and discount income”. Income Statement
Adjustment neg. interest
Adj. Income Statement
–17,983
36,086
18,103
3,223
–
3,223
Interest expenses
25,830
–36,086
–10,256
Gross result from interest operations
11,070
–
11,070
–89
–
–89
10,981
–
10,981
CHF 1,000 Interest and discount income Interest and dividend income from financial investments
Changes in value adjustments for default risks Result from interest operations
34
SIX Securities Services Ltd Consolidated Financial Statements 2015
Information on off-balance-sheet transactions
24. Contingent assets and liabilities, credit commitments and subordinated assets and liabilities As in previous years, there were no material contingent liabilities and assets or unfulfilled credit commitments as at the balance sheet date. Furthermore, there were no subordinated assets or liabilities in the consolidated entities.
There is a (pro memoriam) joint liability together with other SIX Group members arising from the consolidated value-added tax filing status.
25. Fiduciary transactions CHF 1,000
31/12/2015
31/12/2014 1
Fiduciarily managed accounts at SIX SAG Ltd
579
548
Total fiduciary transactions
579
548
1
restated
35
SIX Securities Services Ltd Consolidated Financial Statements 2015
36
SIX Securities Services Ltd Consolidated Financial Statements 2015
37
SIX Securities Services Ltd Consolidated Financial Statements 2015
38
SIX Securities Services Ltd Financial Statements 2015
Financial Statements 2015
39
SIX Securities Services Ltd Financial Statements 2015
Balance sheet
CHF 1,000
Notes
31/12/2015
31/12/2014
7 8 9
101,693 4,037 13,722 47 100 119,598
100,831 1,986 13,395 – – 116,212
1,071 66,061 67,131
1,071 66,211 67,282
186,730
183,494
13 14
2,611 87 1,768 4,466
1,690 52 2,834 4,576
15
511 511
– –
4,977
4,576
Assets Cash and cash equivalents Trade receivables Other receivables Accrued income and prepaid expenses Assets held for sale Current assets Financial assets Investments in subsidiaries and other investments Non-current assets
12
10 11
Total assets Liabilities Trade payables Other payables Accrued expenses and deferred income Current liabilities Other long-term liabilities Non-current liabilities Total liabilities Share capital General legal retained earnings Free reserves Other free reserves Profit carried forward Profit for the year Equity
26,000 10,000
26,000 10,000
89,271 18,647 37,835 181,753
89,271 16,282 37,365 178,918
Total liabilities and equity
186,730
183,494
40
SIX Securities Services Ltd Financial Statements 2015
Income statement
CHF 1,000 Dividend income from investments Service revenues
2015
2014
39,766
33,222
998
558
Other operating income
17,501
21,427
Total operating income
58,265
55,207
Commission and transaction expenses
–157
–5
Service expenses
–2,117
–3,773
Personnel expenses
–7,988
–6,133
Cost of premises
–285
–363
IT infrastructure costs
–335
–1,234
–8,004
–5,239
Consulting and other professional fees Advertising and marketing expenses
–
–15
Other operating expenses
–713
–682
Total operating expenses
–19,599
–17,443
38,665
37,764
11
106
Operating profit before interest and taxes Financial income Financial expenses Net income before taxes Taxes Net income
–967
–14
37,709
37,856
126
–491
37,835
37,365
41
SIX Securities Services Ltd Financial Statements 2015
Statement of changes in equity
Free reserves Other free reserves Free reserves
Share capital
General legal ret. earnings
26,000
10,000
17,782
89,271
143,053
Dividend payments
–
–
–1,500
–
–1,500
Net income
–
–
37,365
–
37,365
31 December 2014
26,000
10,000
53,647
89,271
178,918
Dividend payments
–
–
–35,000
–
–35,000
Net income
–
–
37,835
–
37,835
26,000
10,000
56,482
89,271
181,753
CHF 1,000 1 January 2014
31 December 2015
The share capital comprises 260,000 registered shares of CHF 100 nominal value.
42
Total
SIX Securities Services Ltd Financial Statements 2015
Appropriation of profit
CHF 1,000 Profit carried forward from previous year Net income Distributable profits
31/12/2015
31/12/2014
18,647 37,835 56,482
16,282 37,365 53,647
The Board of Directors proposes to the General Meeting of Shareholders the following appropriation of profit: CHF 1,000 Dividend payment Profit carried forward to the following year
31/12/2015
31/12/2014
35,000 21,482
35,000 18,647
43
SIX Securities Services Ltd Financial Statements 2015
Notes to the financial statements
1. Accounting policies These financial statements have been prepared according to Swiss Generally Accepted Accounting Principles set out under Title 32 of the Swiss Code of Obligations. Any policies not explicitly defined in Swiss law are set out below. In this regard, it should be considered that hidden reserves can be accrued or released to secure sustainable growth.
These financial statements have been prepared for the first time in accordance with the new accounting policies in the Swiss Code of Obligations. Therefore some prior-year balance sheet and income statement items have been regrouped to match the required structure. There were no changes in valuation.
2. Foreign currency conversion Transactions in foreign currencies are posted at the current exchange rates. Monetary balance sheet items are converted into Swiss francs at the exchange rates applicable on the balance sheet date. Non-monetary
balance sheet items are converted at historical exchange rates. Exchange rate gains or losses are credited or debited to the income statement.
The following exchange rates were applied to translate items in foreign currency to CHF: Currency
31/12/2015
31/12/2014
EUR
1.0821
1.2026
GBP
1.4671
1.5396
USD
0.9899
0.9901
3. Assets held for sale Assets held for sale are valued at the lower of cost or market value.
4. Investments in subsidiaries and other investments Investments in subsidiaries and other investments are stated at cost less necessary depreciation.
5. Revenue recognition The revenues for services provided are recognized on invoicing. Invoices are issued after the service was effectively rendered.
44
SIX Securities Services Ltd Financial Statements 2015
6. Number of employees The yearly average number of employees on a full-time equivalent basis was 23.0 (previous year: 19.7)
7. Cash and cash equivalents CHF 1,000
31/12/2015
31/12/2014
Due from third parties
101,693
100,831
Cash and cash equivalents
101,693
100,831
31/12/2015
31/12/2014
8. Trade receivables CHF 1,000 Due from third parties
1
–
Due from group entities
4,036
1,986
Trade receivables
4,037
1,986
31/12/2015
31/12/2014
9. Other receivables CHF 1,000 Due from third parties
418
91
Due from shareholders
13,304
13,304
Other receivables
13,722
13,395
31/12/2015
31/12/2014
10. Financial assets CHF 1,000 Shares SIX Group Ltd
1,071
1,071
Financial assets
1,071
1,071
whereof current whereof non-current
–
–
1,071
1,071
45
SIX Securities Services Ltd Financial Statements 2015
11. Investments in subsidiaries and other investments 31/12/2015
31/12/2014
Capital (nom.)
Share 1
Capital (nom.)
Share 1
SIX x-clear Ltd, Zurich
CHF30,000,000
100%
CHF30,000,000
100%
SIX SIS Ltd, Olten
CHF26,000,000
100%
CHF26,000,000
100%
SIX Systems Ltd, Olten
CHF2,500,000
100%
CHF2,500,000
100%
SIX SAG Ltd, Olten
CHF100,000
100%
CHF100,000
100%
SIX SIS Nominee U.K. Ltd, Olten (indirect participation)
CHF100,000
100%
CHF100,000
100%
Projektgesellschaft Softwareentwicklung Oktober 2011 Ltd, Frankfurt a.M.
EUR50,000
100%
EUR50,000
100%
Oslo Clearing ASA (indirect participation)
–
–
NOK60,000,000
100%
SIX SIS International Ltd, Zurich
–
–
CHF100,000
100%
1
capital and voting rights
12. Assets held for sale or participations in liquidation In 2015, SIX took the decision to sell its share register management and annual general meetings business (SIX SAG Ltd), and entered into negotiations with Computershare Ltd. The two parties aim to complete the sale in 2016.
13. Trade payables CHF 1,000 Due to third parties Due to group entities Due to shareholders Trade payables
31/12/2015
31/12/2014
984
140
1,467
1,120
160
430
2,611
1,690
31/12/2015
31/12/2014
14. Other payables CHF 1,000 Due to third parties
87
52
Other payables
87
52
46
SIX Securities Services Ltd Financial Statements 2015
15. Other long-term liabilities CHF 1,000
31/12/2015
31/12/2014
Due to third parties
511
–
Other long-term liabilities
511
–
31/12/2015
31/12/2014
p.m.
p.m.
31/12/2015
31/12/2014
Maturity from 1 to 5 years
54
–
Liabilities from leasing contracts with maturity > 1 year
54
–
16. Contingent liabilities CHF 1,000 Joint liability from consolidated value-added tax filing status
17. Liabilities from leasing contracts with maturity > 1 year CHF 1,000
18. Net release of hidden reserves No hidden reserves were released to income in the reporting year (previous year: 0).
47
SIX Securities Services Ltd Financial Statements 2015
48
SIX Securities Services Ltd Financial Statements 2015
49
© SIX Group Ltd 2016
SIX Securities Services Ltd Brandschenkestrasse 47 CH-8002 Zurich www.six-securities-services.com
