Author Archives: Stefan Kramer

Stay Recognition Clauses in Financial Contracts

On 16 March 2017, the Swiss Financial Market Supervisory Authority FINMA (FINMA) released final rules on stay recognition clauses in financial contracts that are governed by non-Swiss law and/or subject to the jurisdiction of non-Swiss courts. The new rules are set out in an amendment to the Ordinance of FINMA on the Insolvency of Banks and Securities Dealers (BIO-FINMA) and aim to implement and further specify the scope of the obligation for banks to include stay recognition clauses in financial contracts as provided for in article 12(2bis) of the Ordinance on Banks and Savings Institutions (FBO). The final rules took effect on 1 April 2017, with a 12 months implementation period for contracts with banks and securities dealers and an 18 months implementation period for contracts with all other counterparties.

By Stefan Kramer / Andreas Josuran (Reference: CapLaw-2017-18)

Bail-in Recognition Clause

This paper intents to outline the purpose and scope of article 55 of the European Bank Resolution and Recovery Directive, to present, as an example, the Bail-In Recognition Clause suggested by the Loan Market Association, and to discuss the legal nature of such a clause in a Swiss law governed agreement or document.

By Rashid Bahar (Bär & Karrer), Jürg Frick (Homburger), Theodor Härtsch (Walder Wyss), Marco Häusermann (Niederer Kraft & Frey), Patrick Hünerwadel (Lenz & Staehelin), Stefan Kramer (Homburger), Patrick Schleiffer (Lenz & Staehelin), Bertrand Schott (Niederer Kraft & Frey), Roland Truffer (Bär & Karrer) and Lukas Wyss (Walder Wyss (Reference: CapLaw-2016-44)

Swiss Federal Council Adopts Amendments to the Swiss TBTF Framework

On 11 May 2016, the Swiss Federal Council adopted an amendment to the Capital Adequacy Ordinance which sets out the new capital requirements for systemically important banks and introduces a new gone concern requirement for globally systemically important banks in line with G20 standards as promulgated by the Financial Stability Board. It further defines the required features for capital instruments qualifying for the gone concern requirement (so-called “Bail-in Bonds”) and sets out grandfathering provisions for outstanding instruments. The revised Capital Adequacy Ordinance came into effect on 1 July 2016, subject to phase-in and grandfathering provisions as described hereinafter.

By Daniel Hulmann / Stefan Kramer / Benjamin Leisinger (Reference: CapLaw-2016-25)

Implementing Ordinance of the Federal Council on Swiss Derivatives Trading Rules Published

On 25 November 2015 the Federal Council released the final version of its implementing ordinance (“FMIO”) to the Swiss Financial Markets Infrastructure Act (“FMIA”). The FMIO provides for important clarifications and implementation provisions for, among other things, the new rules on derivatives trading provided for by the FMIA (including clearing, reporting and risk mitigation obligations). The FMIA and the implementing ordinances are expected to become effective on 1 January 2016, subject to a phase-in.

By Stefan Kramer (Reference: CapLaw-2015-57)

Covered Bonds

While traditional (statutory) Pfandbriefe still dominate the Swiss covered bond market, the avenue of structured (contractual) covered bonds has recently been explored when first UBS (in 2009) and then Credit Suisse (in 2010) established their respective covered bond programs and presents an alternative for Swiss mortgage lenders seeking for flexibility and an improved access to international institutional investors. This article describes the key features of Swiss structured covered bonds.