Category Archives: Regulatory

Swiss Withholding Tax – Quo Vadis?

On 26 June 2019, the Federal Council approved the objectives and key figures for a withholding tax reform. The Federal Council wants to strengthen the Swiss debt capital market and to extend the safeguard purpose for Swiss individuals. Interest payments to Swiss entities and foreign investors shall be exempt from withholding tax. For Swiss resident individuals, withholding tax shall also be applied on interest from foreign investments if held through a Swiss paying agent. The consultation draft is expected in autumn 2019.

By Alexandra Hirt (Reference: CapLaw-2019-29)

Board Composition and Ownership Structure in Switzerland – The Empirical Evidence

The theory and practice of corporate governance and capital markets suggest that certain organizational structures of listed companies are to be considered superior to others or even best practice. This article critically reviews the mainstream doctrine and reports on the results of my own empirical research on corporate governance of publicly-traded companies with access to capital markets in Switzerland.

By Valentin Jentsch (Reference: CapLaw-2019-30)

Digital Assets – Proposed Amendments to the Legal and Regulatory Framework of Distributed Ledger Technology in Switzerland

Switzerland targets adjustments of the existing legal and regulatory framework of distributed ledger technology (DLT). The Federal Council initiated consultation on proposed amendments to, inter alia, civil law (including securities law), insolvency law, financial market law, and anti-money laundering regulation on 22 March 2019. This article summarizes the key points of the suggested adjustments and analyses their potential impact on market participants. The content of the rules may still be subject to changes in the ongoing legislative process. 

By Luca Bianchi / Fabio Andreotti (Reference: CapLaw-2019-15)

Reporting of Beneficial Ownership in Unlisted Companies according to Article 697j CO – Some Open Points

On July 1, 2015, new rules regarding reporting of beneficial owners of unlisted companies entered into force in Switzerland (for general remarks on the rules see CapLaw-2015-55). Even four years after their implementation, there are still a number of open questions in practice as regards the application of these rules, both from the perspective of the shareholders (subject to the obligation to report their beneficial owners(s)) and the companies (subject to the obligation to maintain a register of beneficial owners). One reason for these uncertainties is that the relevant provisions are incomplete and in many aspects leave room for interpretation. To date there is no case law that could provide guidance. A currently ongoing revision of the disclosure rules could bring some clarity.

By Alexander Wille / Lukas Held (Reference: CapLaw-2019-16)

Corporate Tax Reform – Capital Contribution Principle for Swiss-listed Companies

On 28 September 2018 the Swiss Parliament approved the final draft bill regarding the corporate tax reform which includes major changes for Swiss-listed companies in relation to the distribution of dividends paid by repayment of capital contribution reserves. It is proposed that Swiss-listed companies may only pay withholding tax-free capital contribution reserves if in the same amount a dividend will be paid from taxable distributable reserves (so-called 50/50 rule).

By Elga Reana Tozzi (Reference: CapLaw-2019-03)

Replacement of LIBOR – An Approach for the Swiss retail lending market

The discontinuation of LIBOR, announced for the end of 2021, is foreseeable. At the same time, for lack of suitable alternatives, LIBOR is still the dominant reference rate in the Swiss retail lending market for floating rate borrowings. As a result, Swiss banks active in the mortgage lending market already now face the challenge to provide for a transition to a successor rate when entering into new contracts. And the same challenge exists generally, both in the retail and the institutional market.

By René Bösch / Benedikt Maurenbrecher (Reference: CapLaw-2019-04)

The Proposed Strengthening of Group Action in Swiss Civil Procedure

In Switzerland, plaintiffs are forced to litigate their claims in court individually, even if they are part of a group that is affected by the same underlying damaging event. In the context of the ongoing partial revision of the Civil Procedure Code the Swiss Federal Council is seeking to facilitate actions for damages for large groups. To this end it is proposing amendments to the existing mechanism of a group action through an organization and the introduction of a novel group settlement method.

By Thomas Werlen / Remo Decurtins (Reference: CapLaw-2018-44)

Revised FINMA Anti-Money Laundering Ordinance

On 18 July 2018, FINMA published its revised Anti-Money Laundering Ordinance (the AMLO-FINMA). The revised AMLO-FINMA is noteworthy not so much for what it contains, but rather for what it does not contain.

By Katrin Ivell (Reference: CapLaw-2018-45)

EU PRIIPs Regulation and MiFID II – Impact on Debt Capital Markets Offerings

In January 2018, two next sets of European rules affecting debt capital markets offerings into the European Economic Area (EEA) have come into effect: the PRIIPs Regulation (EU 1286/2014) on key information documents for packaged retail and insurance-based investment products (PRIIPs) and MiFID II (Directive 2014/65/EU on markets in financial instruments). The PRIIPs Regulation requires that a key information document be prepared and published for all offerings to retail investors that are in scope of the regulation. Its applicability to different types of bonds has been subject to much debate. This article presents an overview of the new regulation and consequences for debt capital markets transactions that include offers to European retail investors. In addition, the article discusses the implications of the new MiFID II rules, which have imposed new product governance obligations on MiFID firms when they manufacture and/or distribute financial instruments. Both sets of rules have resulted in new selling restrictions and contractual provisions being introduced in bond documentation.

By Dorothee Fischer-Appelt (Reference: CapLaw-2018-46)

Overview of SIX’s Directive on the Use of Alternative Performance Measures

For many companies listed on the SIX Swiss Exchange Ltd (SIX), the use of alternative performance measures (APMs) has become a regular tool for communicating the business and financial performance of a company to investors. In light of the widespread use of APMs, their diverse application and the increasing risk of investors being misled, SIX Swiss Exchange Regulation Ltd has issued a new Directive on the Use of Alternative Performance Measures (the Directive). This article provides a brief introduction to the Directive and its application to issuers listed on SIX.

By Deirdre Ní Annracháin (Reference: CapLaw-2018-47)