Category Archives: Regulatory

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)

Management Transactions: Revised SIX Rules Enterinto Effect

On 1 February 2024 SIX’s amended directive on the disclosure of management transactions (DMT) and related changes to the SIX Listing Rules entered into force. Besides a number of procedural and formal changes, the amendments to the DMT focus primarily on related party transactions and introduced a new obligation to report certain follow-on transactions made by related parties. In connection with these amendments to the DMT, SIX Exchange Regulation also published a revised version of its guidelines on management transaction disclosures, setting out its practice and expectations as regards the disclosure of management transactions. SIX listed issuers were only given a short period of time to update their internal regulations and to provide a refresher training to their board members and senior management.

By Daniel Raun / Patrick Schärli (Reference: CapLaw-2024-04)

Crypto Markets: Regulators Worldwide Are Sharpening Their Knives

The long-held myth of crypto markets benefitting from a “legal vacuum” has recently been dismantled once and for all. Whereas the EU has adopted a regulation for markets in crypto-assets (MiCAR), international standard-setters such as the FATF, the FSB, BCBS and IOSCO have issued a series of far-reaching recommendations that are now to be implemented worldwide. Given these significant regulatory headwinds, the crypto industry will inevitably have to go through a process of maturation and consolidation.

By Franca Contratto (Reference: CapLaw-2023-38)

Switzerland’s Quest for a Safe Haven for Crypto Products

Tokens such as cryptocurrencies have caused turmoil in the financial market. Regulators are trying to catch up on the latest developments and adapt 20th century legislation to match up with 21st century technology. In this context, the United States Securities and Exchange Commission (“SEC“) has taken enforcement action against two cryptocurrency exchange platforms, Binance and Coinbase, in an attempt to clarify U.S. law applicable to tokens. The Swiss regulators have taken a more pragmatic approach. This article sets out the current situation in the U.S. and then turns to the legal regime in Switzerland.

By Thomas Werlen / Simon Weber (Reference: CapLaw-2023-39)

Federal Council Submits Draft Legislation on the Introduction of a Public Liquidity Backstop (PLB) for Systemically Important Banks to the Swiss Parliament

By Benjamin Leisinger / Daniel Hulmann (Reference: CapLaw-2023-40)

FINMA’s enforcement tools to uphold supervisory law: Current toolkit and proposed additions

During the current debate on the supervision of financial institutions, FINMA’s enforcement instruments have repeatedly been accused of being ineffective, especially when compared to other foreign financial market supervision authorities’ tools. While FINMA has long been opposed to additional enforcement instruments, this has now changed and FINMA has recently proposed three additional tools to strengthen the authority’s enforcement activities.

The following article discusses the enforcement instruments currently at FINMA’s disposal and the possible additional instruments proposed by FINMA, especially taking into account the supervisory toolkit of foreign enforcement authorities. 

By Lukas Roesler / Stephanie Walter (Reference: CapLaw-2023-25)

Highlights from FINMA’s Annual Report 2022

As every year, the Swiss Financial Market Supervisory Authority FINMA has released its annual report, which summarizes the authority’s regulatory and supervisory activity during the past calendar year. This survey highlights a number of points of particular interest from a capital markets law perspective.

By Roland Truffer (Reference: CapLaw-2023-26)

Non-Financial Reporting

With the entry into force of the reporting obligations on non-financial matters, Swiss listed and/or FINMA-regulated companies will become subject to a comprehensive reporting and disclosure framework on environmental and social matters. The rules on non-financial reporting include in particular detailed disclosure requirements on climate-related matters, all in line with international standards and recommendations. The new set of Swiss disclosure and reporting rules follows trends and similar legislative initiatives in other jurisdictions, most notably in Europe. For this reason, it is important for Swiss companies to understand how ESG-related reporting and disclosure rules in several jurisdictions may be of relevance and where the relevant rules provide for possibilities of substituted compliance in order to avoid duplication of work.

By Patrick Schärli (Reference: CapLaw-2023-13)

Draft Implementing Provisions on the Limited Qualified Investor Fund (L-QIF): A Missed Opportunity for Improving the Competitiveness of the Swiss Fund Market

On 23 September 2022, the Swiss Federal Council opened the consultation procedure on the draft for an amendment to the Collective Investment Schemes Ordinance (CISO) and a number of fund-related provisions in other ordinances. The core content of the consultation draft (Consultation Draft) is the implementing provisions regarding the Limited Qualified Investor Fund (L-QIF), a new category of Swiss collective investment schemes (CIS) which, unlike all existing categories of Swiss CIS, do not require FINMA approval or authorization.

The basis for the introduction of the L-QIF was created through a partial revision of the Collective Investment Schemes Act (CISA) passed by the Swiss Parliament on 17 December 2021. As the legal provisions contained in CISA – deliberately – regulate the L-QIF only in broad terms, and important aspects such as the investment regulations applicable to the L-QIF are delegated to the Federal Council for regulation at ordinance level, the content of the CISO rules is of decisive importance for the attractiveness and, as a consequence, the future success of this new fund category.

This article summarizes and discusses the key points of the proposed regulation of the L-QIF at ordinance level pursuant to the Consultation Draft. Proposed changes to ordinance provisions that are not directly related to the L-QIF will not elaborated on here.

By Sandro Abegglen / Yannick Wettstein (Reference: CapLaw-2023-14)

Position Paper on Disclosure Obligations of the Banking Syndicate in Swiss ECM Transactions

Swiss law requires the public disclosure of significant shareholdings in Swiss listed companies to increase transparency and ensure equal treatment among market participants. In particular, market participants shall be informed about who actually controls and who is building up or reducing a stake in a Swiss listed company which is particularly relevant in connection with a potential public takeover transaction. In light of these objectives, the overarching principle of the Swiss regime for the disclosure of significant shareholdings is to look at the economic situation and towards the person that is the beneficial owner, i.e. the person that is controlling the voting rights stemming from a shareholding and bearing the associated economic risk. A change in practice announced by the disclosure office of SIX Swiss Exchange (SIX)1, triggered a certain degree of uncertainty among market participants regarding the disclosure obligations of the members of the banking syndicate2 in Swiss equity capital markets transactions. The purpose of this position paper is to lay out the joint position of leading Swiss capital markets law firms on this topic to facilitate a uniform approach in Swiss equity capital markets transactions and increase legal certainty. For this purpose, it has also been discussed with leading banks in Switzerland and reflects their understanding and approach on the relevant matters. 

(Reference: CapLaw-2023-02)