Welcome to CapLaw

CapLaw is the first electronic newsletter providing up-to-date information on legal and regulatory developments, concise articles and reports on deals and events with particular focus on Swiss capital markets. CapLaw is addressed to all Swiss and international lawyers, in-house counsels financial institutions and corporates as well as those who are interested in the Swiss capital markets.

The Editors
René Bösch, Homburger AG
Franca Contratto, University of Lucerne
Thomas Reutter, Bär & Karrer AG
Patrick Schleiffer, Lenz & Staehelin
Philippe A. Weber, Niederer Kraft & Frey AG
Thomas Werlen, Quinn Emanuel Urquhart & Sullivan, LLP

Acquisition of The Medicines Company

In connection with the acquisition of NASDAQ-listed biopharmaceutical company The Medicines Company for USD 9.7 billion, Novartis AG and Novartis Finance Corporation entered into a USD 7 billion short-term (bridge) credit agreement and completed a USD 5 billion four-tranche SEC-registered bond offering.

Placement of SGS Shares

The von Finck family successfully placed 960,000 shares (approx. 12.7%) in SGS SA by way of an accelerated bookbuilding process. The overall transaction volume amounts to CHF 2.3 billion. In light of its long-term investment strategy and planning, the family decided to divest a majority of its stake in SGS.

Valyo Innovative Capital Market Platform

Valyo AG, a subsidiary of Raiffeisen Switzerland, has developed an innovative digital platform for issuances of exchange listed bonds geared towards institutional investors. The Valyo platform, intended to be launched in the first quarter of 2020, enables issuers to carry out all steps from the initial registration of a planned issuance through the book building process to closing and listing of the bond issuance in an integrated digital process.   

The New Swiss Prospectus Regime

In June 2018 the Swiss Federal Parliament passed the Financial Services Act and the Financial Institutions Act, and on 6 November 2019 the Swiss Federal Council published the implementing ordinances thereto. The acts and the related ordinances will become effective on 1 January 2020. Modeled largely after the EU prospectus framework, the new prospectus regime marks a veritable paradigm change to Swiss capital market regulation, introducing a number of novelties for issuers of securities in the Swiss market, such as the requirement for an ex ante approval for most financial instruments, coupled with some important long-awaited explicit exemptions from such requirement and the requirement for a prospectus for secondary public offerings.

By Christian Rehm / René Bösch (Reference: CapLaw-2019-51)

Countdown at the Point of Sale – Final Version of Financial Services Ordinance Published

On the way to the new Financial Services Act (FinSA), the final version of the Financial Services Ordinance (FinSO), which was published on 6 November 2019, started the final countdown towards the implementation of these new regulations in the light of their entry into force on 1 January 2020. As of that date, financial services providers must, in principle, comply with the new regulations (including the key adjustments made in the final version of the FinSO). However, various transitory provisions provide for (temporary) relief from the apparent time pressure.

By Sandro Abegglen / Luca Bianchi (Reference: CapLaw-2019-52)

The Basic Information Sheet – No surprises in the final implementing ordinances, but some relevant amendments

On 1 January 2020 the new Swiss Financial Services Act (FinSA) and its implementing ordinance, the Financial Services Ordinance (FinSO), will come into effect. The Swiss Federal Council announced its decision on the entering into force of the new financial services regulation and the final text of the implementing ordinances on 6 November 2019. There are no big surprises in the final ordinances regarding the newly introduced basic information sheet (Basisinformationsblatt). However, a number of amendments were made based on responses in the consultation process of the draft ordinances.

By Daniel Haeberli (Reference: CapLaw-2019-53)

Update: The Enforcement of Clients’ Rights in the Financial Services Act

The Financial Services Act (FinSA) as it will enter into force on 1 January 2020 contains two elements of an initially broad set of proposals meant to strengthen the enforcement of clients’ rights. First, it specifies the scope of records to be kept regarding a service provider’s relationship with a client and gives the client an unambiguous legal basis to obtain a copy of such records on request. Second, it will require all providers of financial services to be affiliated with an ombuds institution. Parliament ultimately opposed the introduction of new procedural mechanisms such as collective action instruments and changes to the ‘loser pays’ rule, referring to ongoing efforts towards a broader reform of the Civil Procedure Code.

By Thomas Werlen / Jonas Hertner (Reference: CapLaw-2019-54)

The New Registration Duty for Client Advisers – An Update on the Final FinSO

On 6 November 2019, the Federal Council decided that the Financial Services Act (FinSA) would enter into force on 1 January 2020. Subject to a transition regime, the FinSA will introduce a new registration duty for client advisers of Swiss financial service providers not subject to prudential regulation and client advisers of foreign financial institutions. Today, no such registration requirement exists with the exception of similar obligations for untied insurance intermediaries, who have to register with the public register kept by the Swiss Financial Market Supervisory Authority (FINMA).

Under the new regime, client advisers will be required to register in a register maintained by one or more registration bodies licensed by FINMA. To register, they must evidence sufficient knowledge of the rules of conduct under the FinSA and the necessary expertise to perform their duties, adequate financial means as well as affiliate themselves with an ombudsman’s office. Clients may check the register at any time to verify that their adviser has the required qualifications. The registration will, however, not imply any prudential or ongoing supervision by FINMA. If a client adviser no longer meets the registration requirements, the adviser will be deleted from the register by the competent registration body and may, consequently, no longer engage in activities as a client adviser.

By Martin Peyer (Reference: CapLaw-2019-55)

Funds Distribution under the new financial market law architecture

On 1 January 2020, the new Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) will enter into force. This entails various changes of existing regulatory concepts in the context of distribution and management of collective investment schemes. From today’s CISA perspective, the term “distribution” under Art. 3 CISA plays a fundamental role. Under the new regulatory regime, an exclusive focus on the new concept of the offer falls short in explaining the rules governing the distribution of funds. Particularly with regard to the behavior at the point of sale, the concept of financial services is of primary importance. 

By Diana Imbach Haumüller / François Rayroux (Reference: CapLaw-2019-56)

Something Old, Something New: The Supervision of Financial Institutions under the Federal Act on Financial Institutions – FinIA Cleared for Takeoff

On 1 January 2020, the Federal Act on Financial Institutions of 15 June 2018 (FinIA) will enter into force together with the Federal Act on Financial Services (FinSA). The FinIA revises the regulatory architecture for financial institutions. Instead of the current sectorial approach, the FinIA proposes to introduce a regulatory pyramid with a light regulatory framework for asset managers and trustees, and an increasingly more stringent regime for managers of collective assets, securities firms – the new denomination for securities dealers – and, at the top, banks, although they will be continue to be governed by the Federal Act on Banks and Saving Banks of 8 November 1934 (Banking Act, SR 952.0) and remain out of scope of the FinIA. Furthermore, the FinIA introduces several new regulatory regimes: it subjects portfolio managers and trustees to prudential supervision and extends the current regime applicable to asset managers of collective investment schemes to asset managers of pension funds. Moreover, it recasts the existing regime applicable to securities dealers under the Federal Act on Stock Exchanges and Securities Dealing of 24 March 1995 (SESTA, SR 954.0) into a slightly modified new regime for securities firms. This article updates the previous versions now that the Federal Council passed the Ordinance on Financial Services of 6 November 2019 (FinSO) and the Ordinance on Financial Institutions of 6 November 2019 (FinSO)

By Rashid Bahar (Reference: CapLaw-2019-57)