Category Archives: Securities

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)

Cooling-off Periods under the New Swiss Rules on Insider Trading and Market Manipulation

One of the key changes of the new Swiss laws on market abuse that entered into force on 1 May 2013 was the introduction of administrative law rules on insider trading and market manipulation which apply to all market participants. As a result thereof, Swiss publicly listed companies should, among other things, revisit their current internal trading regulations with a focus on cooling-off periods following the publication of price sensitive information to avoid any potential implications and/or allegations that market activities taken by the company or its directors, employees, affi liates, etc. are a form of market abuse.

By Philippe Weber/Christina Del Vecchio (Reference: CapLaw-2014-11)

Accelerated T+2 settlement in Switzerland starting October 2014

Starting 6 October 2014, securities tradable on SIX Swiss Exchange and SIX Structured Products Exchange and settling through the Swiss central securities depository SIX SIS will settle after two business days.

By René Bösch/Benjamin Leisinger (Reference: CapLaw-2014-12)

The Federal Supreme Court Rules on Nominees’ Disclosure Obligations

On 29 July 2013, the Federal Supreme Court decided on article 9(2) SESTO-FINMA, one of the provisions whereby FINMA intended to implement the regulation set forth in article 20 SESTA on disclosure duties for substantial positions in companies listed in Switzerland. The Federal Supreme Court ruled that article 9(2) SESTO-FINMA has no legal basis in the SESTA to generally require notifications to the stock exchange and the companies by nominees acquiring or selling equity securities for the account of several beneficial owners that are independent of each other. The consultative draft of the Financial Market Infrastructure Act would provide for an express legal basis for such disclosure, if enacted.

By Benjamin Leisinger (Reference: CapLaw-2014-1)

Alternatives and Trends on the Binding Vote on “Say on Pay”

In CapLaw-2013-14 the editors of CapLaw commented on the draft ordinance (the Draft Ordinance) for the implementation of the constitutional initiative against excessive compensation (the Minder Initiative). Following the end of the consultation period for the Draft Ordinance, the final version of the “Ordinance against Excessive Compensation in Listed Companies” (Verordnung gegen übermassige Vergütungen bei börsenkotierten Gesellschaften; VegüV) (the Ordinance) was published on 20 November 2013 and entered into force on 1 January 2014. This article comments on one of the key aspects of the new rules: the “say on pay”, i.e. the shareholders’ vote on executive compensation.

By Daniel Raun/Thomas Reutter (Reference: CapLaw-2014-2)

Prohibited Compensation Payments under the Minder Ordinance (VegüV)

The ordinance implementing the Minder Initiative also introduces new criminal offenses in connection with certain specific and now illicit compensation payments to certain senior persons associated with a listed company. The affected compensation payments encompass: severance payments, payments in advance and commissions for certain M&A transactions. This article endeavors to shed more light on scope and consequences of such prohibited payments.

By Thomas Reutter/Daniel Raun (Reference: CapLaw-2014-3)

The Globalization of Class Actions

In June of this year, the European Commission issued non-binding recommendations inviting member states to introduce collective redress mechanisms at the domestic level. In addition, key EU member states have already implemented or are currently considering introducing class action legislation. This article provides an update on pending proposals towards a EU class action system and gives a brief overview of existing group redress provisions in selected member states.

By Thomas Werlen /Jonas Hertner (Reference: CapLaw-2013-26)

On the Road to Implementing the Minder Initiative

On 3 March 2013, Swiss voters approved the constitutional initiative against excessive compensation which requires, among other things, shareholder approval of board and executive management compensation (the “Minder Initiative”). Final implementation of the Minder Initiative requires legislative action by the Swiss Parliament; however, in the interim the Swiss Federal Council is required to issue an implementing ordinance. A preliminary draft of this ordinance was published on 14 June 2013.

CapLaw intends on dedicating a full issue to the Minder Initiative ordinance once it is finalized by the Swiss Federal Council and comes into full force and effect. In the meantime, the below summarises some initial considerations based on the preliminary draft ordinance published on 14 June 2013.

Overhaul of Swiss Corporate Governance Regime for Listed Swiss Companies Following Approval of the Minder Initiative

On 3 March 2013 a constitutional amendment was approved by the Swiss voters as proposed by the Minder say-on-pay initiative. By the end of May 2013, the Federal Office of Justice is expected to publish a draft implementing ordinance, which will be enacted on 1 January 2014. The implementing ordinance will overhaul the Swiss corporate governance regime for listed Swiss companies pending the enactment of a revised statute of law.

New Swiss Rules on Insider Dealing and Market Manipulation entered into force on 1 May 2013

On 1 May 2013, the new Swiss rules on insider dealing and market manipulation entered into force. They bring about a fundamental change in Swiss administrative and criminal law and will have a significant impact on Swiss practice. Accordingly, issuers, financial institutions, advisers and other affected persons (meaning any other market participant in Switzerland) should familiarize themselves with the new rules and review their internal guidelines, procedures and standard forms to ensure compliance with these new rules and to make appropriate use of the safe harbours available under the new law. Further regulation will follow shortly; in particular, a revised FINMA circular on market behaviour rules, which will apply to all market participants, is expected to enter into force on 1 August 2013.