Author Archives: René Bösch

The Regulatory Agenda for 2024 in Switzerland

Changes in the Swiss financial market over the last two years continue to have a profound impact on regulatory initiatives and legislation in Switzerland. Most notably, the Swiss government used its emergency powers to force a takeover of Credit Suisse by UBS in March 2023 after Credit Suisse suffered significant deposit outflows and a loss of market confidence. This extraordinary intervention spurred questions on the effectiveness of the Too-big-to-fail regime and triggered calls for measures to reestablish confidence in the Swiss financial market. Separately, events including the abolishment of negative interest rates, the substitution of the Swiss Franc LIBOR by SARON, scandals in the international crypto markets and an increased international focus on sustainable finance also continue to affect the regulatory agenda.

By René Bösch / Thomas Werlen (Reference: CapLaw-2024-03)

Reduced Scope of per se Ad Hoc Obligations on SIX

As of 1 February 2024 the current per se Obligation of Issuers having only Bonds listed on SIX Swiss Exchange to publish their Financial Reports by way of an Ad Hoc Announcement is abolished.

By René Bösch / Patrick Schleiffer (Reference: CapLaw-2023-59)

New Legal Provision Enables direct Issuances of Bonds by Swiss Issuers into the US Market for Registered Bonds

With the entry into force of the amendment to the Banking Act relating to bank restructurings on 1 January 2023, another little noticed provision amending the Swiss Code of Obligations has become effective. That provision allows Swiss issuers of debt capital market instruments to directly tap the US market for registered bonds. This contribution explains how that will work.

By René Bösch / Benjamin Leisinger (Reference: CapLaw-2023-01)

Ad hoc Reporting and Supplements under the Financial Services Act

The Financial Services Act and its implementing ordinance require prospectuses to be supplemented in case a new price-sensitive fact has arisen between the time of approval of the prospectus and final completion of a public offer or opening of trading on a trading venue. Such supplements have to be approved by the competent Reviewing Body, unless the information containing the price-sensitive fact is included in an ad hoc notice, in which case the supplement can be merely filed with the Reviewing Body without approval. The revision of the ad hoc rules per 1 July 2021 abolished the per se reportable facts, which has an impact on issuers dealing with certain price-sensitive information prior or around the time of an issuance of securities.

By René Bösch / Benjamin Leisinger (Reference: CapLaw-2021-60)

P.R.I.M.E. Finance – Public Consultation on Draft Revised Arbitration Rules

In January 2021 P.R.I.M.E Finance announced a public consultation on its draft revised Arbitration Rules. In the most ambitious revision of its rules since its inception, P.R.I.M.E. Finance invited specialist firms, financial institutions, arbitrators and any interested parties to contribute their comments by 31 March 2021. Key features of the rules include central roles for the Permanent Court of Arbitration and the P.R.I.M.E. Finance panel of arbitrators, greater transparency, provisions to address complex arbitrations, emergency and expedited rules and an emphasis on efficiency.

By René Bösch (Reference: CapLaw-2021-20)

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)

Discontinuation of LIBOR and Swiss Law-Governed Legacy Bonds – Time to Take a Closer Look

LIBOR was – and still is – the dominant reference rate for CHF-denominated floating rate and other variable interest rate bonds. There is still a significant number of outstanding “legacy bonds” with such variable interest rates that have maturities beyond the end of 2021, the announced time for the discontinuation of LIBOR. This article discusses considerations for issuers and bondholder representatives in dealing with such “legacy bonds”.

By René Bösch / Eduard De Zordi / Benjamin Leisinger / Lee Saladino (Reference: CapLaw-2019-28)

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 New Swiss Prospectus Regime

In June 2018 the Swiss Federal Parliament passed the Financial Services Act and the Financial Institutions Act, and on 23 October 2018 the Swiss Federal Council presented the ordinances implementing these acts for public consultation until early February 2019. It is expected that the acts and its 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-2018-56)

Basel III Implementation in Switzerland: Leverage Ratio and Liquidity

As of 1 January 2018, further elements of the Basel III international regulatory framework for banks on capital and liquidity entered into effect in Switzerland. Notably, the unweighted capital adequacy requirement (leverage ratio) was extended from systemically relevant banks to all banks by requiring a minimum core capital (Tier 1 capital) to total exposure ratio of 3%. As of the same date, the liquidity coverage ratio (LCR) requirement were adjusted to provide for certain simplifications, which will primarily benefit smaller financial institutions. The risk diversification requirements of Basel III measured against Tier 1 capital will enter into effect in Switzerland in 2019. The introduction of the net stable funding ratio (NSFR), which was originally planned for 1 January 2018, has been postponed.

By René Bösch / Benjamin Leisinger / Lee Saladino (Reference: CapLaw-2018-03)