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)

Supervision of Portfolio Managers and Trustees

Under the new Financial Institutions Act (FinIA) entering into force on 1 January 2020, portfolio managers and trustees will have to apply for a license with the Swiss Financial Market Supervisory Authority (FINMA) and become subject to ongoing prudential supervision by new supervisory organizations (SO). After the Swiss parliament passed the new legislation in June 2018, the Swiss Federal Department of Finance (FDF) released its draft implementing ordinance (Draft-FinIO) for consultation in October 2018. On 6 November 2019, the Federal Council adopted the final version of the Financial Institutions Ordinance (FinIO) as well as the implementing ordinance to the new Financial Services Act, and set the entry into force of the new regulation for 1 January 2020. The final FinIO contains various relevant changes for portfolio managers and trustees compared to the Draft-FinIO. Against the background of the imminent entering into force of the new legislation, the purpose of this article is to provide a summary of the license requirements for portfolio managers and trustees as well as the applicable transitional periods.

By Patrick Schleiffer / Ramona von Riedmatten  (Reference: CapLaw-2019-58)

Sunrise terminates SPA with Liberty Global

On 13 November 2019, Sunrise Communications Group AG announced that it had canceled the share purchase agreement with Liberty Global in connection with its proposed acquisition of UPC Switzerland. 

CRISPR Therapeutics AG public offering of an aggregate 4,887,500 common shares

On 20 November 2019, CRISPR Therapeutics AG launched its public offering of an aggregate 4,887,500 common shares on Nasdaq raising approximately USD 315.2 million. CRISPR Therapeutics is a leading gene editing company based in Zug, Switzerland, focusing on developing transformative gene-based medicines for serious diseases based on its proprietary CRISPR/Cas9 technology.

Jacobs Holding completes the placement of Barry Callebaut Shares

Jacobs Holding AG successfully placed 550,000 shares (approx. 10%) in Barry Callebaut AG by way of an accelerated bookbuilding process and a simultaneous private placement. Jacobs Holding thus diversified its portfolio while remaining Barry Callebaut’s reference shareholder with a stake of approximately 40%. Jacobs Holding is an investment company founded by entrepreneur Klaus J. Jacobs. The only economic beneficiary of Jacobs Holding is the Jacobs Foundation, one of the world’s leading charitable foundations for the promotion of development opportunities for children and young people.

Canton of Geneva issued a Green Bond

On 28 November 2019 the Canton of Geneva issued green bonds listed on the SIX Swiss Exchange in an aggregate amount of CHF 660 million. The issuance was made according to the Green Bond Principles published by the International Capital Market Association, and divided into three respective tranches of CHF 175 million with a maturity in 2028, CHF 200 million with a maturity in 2039 and CHF 285 million with a maturity in 2032.

WisdomTree Issuer X Limited launched one of the world’s first crypto index ETP listed on a regulated stock exchange

On 3 December 2019, WisdomTree Issuer X Limited was recognized by the SIX Swiss Exchange as a new Exchange Traded Product (ETP) issuer to its trading segment and, launched one of the world’s first crypto index ETP listed on a regulated stock exchange. The ETP is investing in Bitcoin.