Author Archives: Thomas U. Reutter

PIPEs in the Age of SPACs

Two acronyms have been echoing throughout international capital markets: PIPEs and SPACs. While private investments in public equity “(PIPEs”) have been a traditional financing technique, Switzerland’s regulator FINMA has finally given the green light to SIX Swiss Exchange (“SIX”), Switzerland’s largest stock exchange, to allow listings of special purpose acquisition companies (“SPACs”). International DE-SPAC deals have demonstrated that PIPEs play an essential role in the SPAC life cycle.

By Ralph Malacrida / Thomas Reutter (Reference: CapLaw-2021-57)

To flag or not to flag – A few thoughts regarding the new obligation to flag ad hoc announcements under the Listing Rules of SIX Swiss Exchange AG

Issuers listed on SIX Swiss Exchange (SIX) are, as a matter of principle, required to inform the market of any price-sensitive facts which have arisen in their sphere of activity (ad hoc publicity). SIX announced a revision of the Listing Rules as well as the Directive on Ad Hoc Publicity and the Directive on Corporate Governance, which will enter into force on 1 July 2021. Among other changes, the revision affects the way ad hoc disclosures need to be communicated and published by introducing a flagging obligation for communication deemed to be price sensitive and therefore an “ad hoc disclosure”. This article sets out certain considerations that issuers should bear in mind when making a determination on whether or not to flag corporate communication as an “ad hoc announcement”. 

By Rashid Bahar / Thomas Reutter (Reference: CapLaw-2021-48)

A new proxy adviser regulation in Switzerland?

The Swiss Parliament has adopted a motion requiring the Swiss government to propose a new regulation addressing the conflicts of proxy advisers. The primary focus seems to be on ISS and to a lesser extent on Glass Lewis for their potential dual role in advising institutional investors on voting recommendations and listed companies on corporate governance and compensation. In the absence of a physical presence of these proxy advisers in Switzerland, it remains unclear how the required legislation could be effectively enacted. 

By Thomas U. Reutter / Annette Weber (Reference: CapLaw-2020-24)

Popular Initiative on Responsible Enterprises: Switzerland’s Long Arm on Subject Enterprises

Although its fate and timing are very unclear, the popular initiative “for responsible enterprises – for the protection of human rights and environment” (initiative on responsible enterprises; Konzernverantwortungsinitiative; Initiative Multinationales Responsables; “Initiative”) is not only hotly debated among the many Swiss based international companies that would be affected by it, but also among lawmakers in Berne. In short, the Initiative, which is expected to be voted upon by the Swiss people, proposes that enterprises shall be held liable before a Swiss court if one of its controlled enterprises violates human rights or environmental standards abroad. These enterprises will have additional duties and will have to monitor and report on the compliance with these duties.

The Initiative raises a bundle of legal questions of which we focused on one: Its scope of applicability. As we will see, a far reaching concept is proposed to ensure that a large number of enterprises is subject to the Initiative.

By Thomas U. Reutter / Annette Weber (Reference: CapLaw-2019-14)

Insider Trading and Market Manipulation in Tokens

Trading in tokens is currently in the spotlight of the public’s and the regulator’s attention. Based on distributed ledgers-technology, blockchain technology is used to issue tokens as tradable digital units and to record ownership and transactions of the issued tokens. At present, there are no specific laws and little regulation applying to trading in tokens in Switzerland. With a view to improve market confidence as well as to ensure proper functioning and transparency of token trading, a variety of legal issues have yet to be resolved. In particular, the question of insider trading and market manipulation needs to be clarified.

By Thomas U. Reutter / Daniel Raun (Reference: CapLaw-2018-43)

EU Shareholder Rights Directive: Action required for Switzerland?

Efforts to amend the EU Shareholder Rights Directive have lost momentum. The most recent resolution of an EU institution has been passed more than a year ago by the EU parliament. The Brexit vote in the United Kingdom has cast further doubt on the directive’s future design. Nevertheless, efforts to improve the governance of European companies and to strengthen the rights of shareholders will continue and the most recent proposal to amend the directive is likely still indicative of the future form and shape of corporate governance in the EU. Third countries like Switzerland should closely monitor the EU’s next steps on the directive, analyze any gaps and decide whether such gaps should be closed.

By Thomas U. Reutter (Reference: CapLaw-2016-43)

Capital “On Demand”: Equity Lines / Share Subscription Facilities for Swiss Listed Companies

Many listed companies are seeking “on-demand” capital solutions that are tailor made to their specific needs. These companies often enter into arrangements with an institutional investor, whereby the company has the right to call specified amounts of cash from the investor against issuance or delivery of a certain amount of shares in return. Such arrangements are often referred to as “equity lines”, “equity distribution agreements” or “share subscription facilities”. This article explores how such agreements are best structured for Swiss listed and incorporated issuers from both a corporate and a capital markets perspective.

By Thomas Reutter / Annette Weber (Reference: CapLaw-2016-18)

Is a Regulation of Proxy Advisers needed in Switzerland?

Proxy adviser have now come to play an important role for listed companies in Switzerland with a significant free float. The breadth of the phenomenon is relatively recent and coincided with the enactment and entry into force of the Ordinance against Excessive Compensation for listed companies (OaEC; Verordnung gegen übermässige Vergütungen in börsenkotierten Unternehmen (VegüV)), which mandates, inter alia, a binding shareholder resolution on say on pay. The increased power of proxy advisers also gives rise to some concerns and to the question of how to address them.

By Thomas U. Reutter (Reference: CapLaw-2015-16)

SIX overhauls regulatory standards for listing

SIX Exchange Regulation, the regulatory body of the main Swiss stock exchange, has confirmed plans to overhaul its regulatory listing standards. The sub-division into Main Standard and Domestic Standard will be abolished and issuers may choose between an International and a National or Swiss Standard. The only major difference between the two new regimes will be the applicable financial reporting standard. IFRS or US GAAP must be used on the International Standard. Issuers who do not wish to report under either of these two standards, but opt for Swiss GAAP FER instead, will be listed on the National Standard. The changes are planned to become effective on 1 July 2015.

By Thomas U. Reutter (Reference: CapLaw-2015-1)

The New Rules on Delisting in Practice

On 1 March 2014, SIX Exchange Regulation’s revised Directive on Delisting came into force. The introduction of a shareholders’ right to challenge the period set between the delisting announcement and the last day of trading is probably the most significant change. Such period may be set by the SIX Exchange Regulation between 3 and 12 months with a view to providing shareholders the possibility to sell their stock on-exchange prior to delisting. The issuer is no longer obliged to provide for off-exchange trading after the delisting. A few months after entering into force, the revised Directive on Delisting has been tested in three instances which provide insight into how SIX Exchange Regulation intends to apply the rules.

By Mariel Hoch/Thomas Reutter (Reference: CapLaw-2014-22)