Category Archives: Securities

Position Paper on Legends and Selling Restrictions for Cross-Border Offerings of Securities (excluding Collective Investment Schemes and Structured Products) into Switzerland under the Prospectus Regime of the Swiss Financial Services Act

(Reference: CapLaw-2020-13)

“What are you, and if so, how many?” – Considerations on Compliance with the new 500-Investor Rule in Practice

Under the newly enacted Financial Services Act (FinSA), a prospectus is not required if a public offer of securities is directed at less than 500 investors. This article considers the new 500-investor rule from a practical perspective and proposes guidelines for potential offerors who wish to rely on it.

By David Weber (Reference: CapLaw-2020-14)

Sustainability Considerations in Debt Finance Transactions

The financial sector plays an important role in addressing climate change issues. While it is recognized that climate change can have an impact on financial stability, the financial sector can contribute to a reduction in greenhouse gas emissions. This article provides an overview of the various green / sustainable financing methods and their main characteristics, and summarizes recent developments in financial law and regulation to strengthen credibility of and faith in sustainable financial products.

By Charlotte Rüegg (Reference: CapLaw-2020-15)

New Rules on the Disclosure of Beneficial Owners and the Death Knell for Bearer Shares

On 21 June 2019, the Swiss Federal Assembly passed the Federal Act on the Implementation of the Recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Act) into law. The Act sounds the death knell of bearer shares for non-listed companies. It also introduces criminal law sanctions for breaches of the obligation to disclose beneficial ownership of shares and several corporate housekeeping duties regarding the share register and the register of beneficial owners. Finally, it provides for draconian sanctions for holders of bearer shares who would fail to comply with their disclosure duties and for companies who would fail to maintain the requisite corporate registries or issue bearer shares in breach of the new provisions. At the same time, the Act also introduces some clarifications around the disclosure of beneficial owners and several issues that were subject to controversy.

By Rashid Bahar (Reference: CapLaw-2019-39)

Expiration of Swiss Stock Exchange Equivalence and Activated Protective Measure

On 30 June 2019, the European Commission did not extend the so-called equivalence recognition of the Swiss legal framework applicable to stock exchanges. As a reaction, the Swiss Federal Department of Finance activated countermeasures designed to protect Swiss financial market infrastructures, in particular Swiss stock exchanges. This article provides an overview of the events surrounding the equivalence of the legal and supervisory framework applicable to stock exchanges and further discusses key legal considerations relevant to financial market participants.

By Ramona von Riedmatten (Reference: CapLaw-2019-26)

The Rise of Swiss Domestic Covered Bond Programmes

In the recent past, Swiss domestically oriented covered bond structures have become increasingly popular. Under recent successfully established domestic, purely Swiss law governed covered bond structures, Swiss issuers have been able to replicate traditional English law elements of covered bonds under Swiss law, enabling the covered bonds to be assigned a triple-A rating. This article discusses the key features.

By Stefan Kramer / David Borer (Reference: CapLaw-2019-27)

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)

Can publicly available data become insider information?

Investors of the twenty-first century can harness the power of publicly available data to form a view on a specific company or – more generally – on a particular investment topic. Satellite imagery, marine and air traffic trackers, keyword or search engine trends can provide critical insights on how a company is performing, sometimes unbeknownst to the company itself and most other interested investors. This contribution explores whether there are circumstances in which data extracted from public sources is or can become insider information under Swiss law.

By Ariel Ben Hattar (Reference: CapLaw-2019-13)

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)

Asset Backed Securities Under the Financial Services Act

The Financial Services Act of 15 June 2018 (FinSA) and the consultation draft Financial Services Ordinance (draft FinSO) dated 24 October 2018 include significant new rules for the distribution of financial instruments and the regulation of financial services in Switzerland. This article discusses the potential impact of the new rules on Asset-Backed Securities (ABS) in relation to the timing of prospectus review and approval, the obligation to prepare a Key Investor Document (KID) and the regulation of services typically provided by investment banks in connection with ABS transactions. The article is based on the version of draft FinSO published for public consultation.

By Daniel Adler / Daniel Bono (Reference: CapLaw-2019-01)