Author Archives: Patrick Schärli
Management Transactions: Revised SIX Rules Enterinto Effect
On 1 February 2024 SIX’s amended directive on the disclosure of management transactions (DMT) and related changes to the SIX Listing Rules entered into force. Besides a number of procedural and formal changes, the amendments to the DMT focus primarily on related party transactions and introduced a new obligation to report certain follow-on transactions made by related parties. In connection with these amendments to the DMT, SIX Exchange Regulation also published a revised version of its guidelines on management transaction disclosures, setting out its practice and expectations as regards the disclosure of management transactions. SIX listed issuers were only given a short period of time to update their internal regulations and to provide a refresher training to their board members and senior management.
By Daniel Raun / Patrick Schärli (Reference: CapLaw-2024-04)
SIX Enforcement Actions in 2023
2023 was a fairly busy year for SIX Exchange Regulation (SER), the regulatory body of the SIX Swiss Exchange, in terms of enforcement and sanctions proceedings. 2023 saw a striking increase in enforcement proceedings and investigations compared to 2022. In these proceedings and investigations, SER focused in particular on breaches of the ad hoc publicity rules. While there were already a number of ad hoc publicity related investigations and decisions in 2022, SER concentrated even more of its efforts on ad hoc publicity matters in 2023 with a significant increase in sanctions decisions and newly opened investigations (many of which are still ongoing). As in previous years, SER also continued reviewing and, where necessary, investigating financial reporting of listed companies. Moreover, in 2023 SER also made use of its most far-reaching sanction tool by ordering the delisting of three companies.
By Martina Pavicic / Patrick Schärli (Reference: CapLaw-2023-58)
Non-Financial Reporting
With the entry into force of the reporting obligations on non-financial matters, Swiss listed and/or FINMA-regulated companies will become subject to a comprehensive reporting and disclosure framework on environmental and social matters. The rules on non-financial reporting include in particular detailed disclosure requirements on climate-related matters, all in line with international standards and recommendations. The new set of Swiss disclosure and reporting rules follows trends and similar legislative initiatives in other jurisdictions, most notably in Europe. For this reason, it is important for Swiss companies to understand how ESG-related reporting and disclosure rules in several jurisdictions may be of relevance and where the relevant rules provide for possibilities of substituted compliance in order to avoid duplication of work.
By Patrick Schärli (Reference: CapLaw-2023-13)
FINMA Guidance 02/23: Expiry of Transition Period for Portfolio Managers and Trustees
On 30 January 2023, the Swiss regulator FINMA published guidance 02/2023 with which it provided an update on the status of the licensing process for portfolio managers and trustees. At the same time, FINMA gave an outlook on its enforcement activities in 2023, which serves as a clear warning for those portfolio managers and trustees that continue to operate their business without the appropriate FINMA license.
By Patrick Schärli (Reference: CapLaw-2023-04)
Corporate ESG Reporting
Over recent years ESG (environmental, social and governance) matters have increasingly become the focus of a wide-range of investors, and corporates are expected to comprehensively report on these type of topics. In line with this general development and on the back of the so-called “Responsible Business Initiative”, Swiss corporate law has been amended over the recent years to provide for specific ESG-related due diligence obligations and reporting requirements. These reporting requirements will apply for most part for the first time for the 2023 financial year (with some of the rules already applying to the 2022 financial year). This article provides and overview of the Swiss corporate law ESG due diligence and reporting obligations.
By Patrick Schärli (Reference: CapLaw-2022-37)
FinSA and FinIA: Update on Transition Periods
On 1 January 2022 the Swiss Financial Services Act (“FinSA“) and the Swiss Financial Institutions Act (“FinIA“) entered into force. While the FinSA provides for a wide range of new rules applicable to financial service providers, irrespective of their licensing status, and new documentation rules applicable to financial instruments, the FinIA introduced, among other things, new licensing requirements for portfolio managers and trustees. The two acts provided for a number of transition periods; on 31 December 2021 the clock ran out on most of these transition periods.
By Patrick Schärli (Reference: CapLaw-2022-04)
Position Paper regarding selected Aspects of the Financial Services Act (FinSA)
With the entry into force of the Swiss Financial Services Act (FinSA) as of 1 January 2020, new regulatory duties and requirements for Swiss and foreign financial service providers which are active in Switzerland or serve Swiss clients proactively on a cross-border basis were introduced. However, the practical application of the new law revealed that various newly introduced legal terms and concepts of the FinSA require more specific explanation and some statements made in the course of the implementation process require clarification.
The authors of this position paper are practicing lawyers working with various Zurich based law firms who regularly exchange views on new legal developments and share their experience in the application and implementation of the law. The views and positions expressed in this position paper are those of the individual contributing authors and not those of the respective law firms or other market participants.
(Reference: CapLaw-2021-30)
Social Trading
The ongoing digitization of the financial services markets and the near ubiquitous availability of smartphones and mobile broadband internet resulted in a rise of digital-only financial service providers over the recent years. Unlike their more traditional “brick and mortar” competitors, these new financial service providers offer their services almost exclusively through digital channels and at significantly lower costs, making financial services, in particular securities trading, available to a broad base of retail investors. Combine this phenomenon with social media features, such as influencers, and the result is social trading. In this article, we take a closer look at the Swiss financial market regulatory aspects of social trading.
By Patrick Schärli / Patrick Schleiffer (Reference: CapLaw-2021-15)
Revised Corporate Law to Facilitate Accounts in Non-Swiss Currencies and Interim Dividends
On 19 June 2020, the Swiss Parliament, after a lengthy legislative process, adopted a bill on a comprehensive corporate law reform that, inter alia, permits a share capital denominated in certain non-Swiss currencies and introduces the option for interim dividends and distributions. Both of these aspects are of particular importance for multi-national groups with subsidiaries located in Switzerland. In the following, we take a closer look into each of these two new Swiss corporate law features and address the respective requirements, consequences and potential need for action.
By Patrick Schärli / Patrick Sattler (Reference: CapLaw-2020-57)
Supervision of Portfolio Managers and Trustees
Under current Swiss law, portfolio managers and trustees are not subject to a comprehensive prudential supervision, a situation that will change under the recently passed new Financial Institutions Act (FinIA). After the Swiss parliament passed the new legislation in June 2018, the Swiss Federal Department of Finance released its draft implementing ordinance (Draft-FinIO) for consultation. Under the new legislation, portfolio managers and trustees will have to apply for a license from the Swiss Financial Market Supervisory Authority (FINMA) and they will be subject to ongoing prudential supervision by new supervisory organizations. The FinIO specifies the license requirements for portfolio managers and trustees, taking into account the nature of these businesses and providing a certain amount of flexibility with respect to the requirements to be fulfilled by smaller businesses. While the new rules will come as a challenge for many of the existing portfolio managers and trustees, the FinIA and the FinIO also provide for transitional periods allowing these existing portfolio managers and trustees to transition gradually into the new regulatory regime.
By Patrick Schleiffer / Patrick Schärli (Reference: CapLaw-2018-65)