On 28 February 2025, the arbitral tribunal of the Court of Arbitration of SIX Group Ltd. issued the final award in X. AG v. SIX Exchange Regulation AG (SER). The case revolved around the timeliness of an ad hoc announcement issued in connection with a complex internal investigation into X. AG‘s financial reporting practices. The arbitral tribunal found that the announcement had been made in a timely manner. The tribunal also provided important guidance on ad hoc disclosure obligations in the context of internal investigations and other complex or evolving factual situations.
1) Introduction
Few decisions from the judicial bodies of SIX Swiss Exchange have so effectively reshaped the contours of ad hoc disclosure obligations as the final award in the matter X. AG v. SIX Exchange Regulation AG (SER) (the Award). In what can be considered a landmark ruling, the arbitral tribunal of the Court of Arbitration of SIX Group Ltd. (the Tribunal) provided important guidance on ad hoc disclosure obligations in the context of internal investigations and other complex or evolving factual situations (gestreckte Sachverhalte; referred to as protracted processes in European capital markets law). The Award addresses the concept of staggered disclosure, which SER advocates for such situations in its Guideline on the Directive on Ad hoc Publicity (DAH and the DAH Guideline, respectively). The Award further discusses the applicability of the business or legal judgment rule to an issuer‘s decision whether or not to publish an ad hoc announcement. It upheld X. AG‘s position that the Listing Rules (the LR) and the DAH afford issuers a margin of discretion when deciding whether or not to make an ad hoc announcement, thus considerably limiting the scope of subsequent regulatory or arbitral review of such decisions.
This article first summarizes the factual background and procedural posture in the X. AG v. SER arbitration (II.), before turning to an analysis of the Tribunal‘s rulings on the applicable ad hoc disclosure threshold in the case at hand (III.) and the protection of the issuer‘s margin of discretion in ad hoc disclosure (IV.). The article concludes with a brief discussion of the precedential value of the Award (V.).
2) Background of the X. AG v. SER Case
a) Facts
The key issue in X. AG v. SER centered on the timeliness of X. AG‘s ad hoc announcement regarding the interim results of a complex, global internal investigation into the company‘s accounting practices and compliance with the applicable financial reporting standard (the Ad hoc Announcement). The Ad hoc Announcement stated that, due to the ongoing investigation, the publication of X. AG‘s full-year results would be postponed and that a restatement of previous financial figures might be necessary.
The investigation had been triggered by whistleblower reports alleging that employees had been pressured to book entries that may not have complied with applicable accounting standards. The company engaged external counsel and forensic accounting review advisors to investigate the allegations.
Initial findings were presented in a status update approximately two months before the Ad hoc Announcement (the Status Update). Investigation counsel reported in particular that it had identified potentially problematic bookings and questionable internal email communications. These findings were expressly characterized as preliminary and remained inconclusive as to whether there had been any material breaches of accounting standards and whether a restatement of prior financial figures would become necessary. Moreover, management and other involved personnel vigorously denied any wrongdoing or recording of entries that did not comply with applicable accounting standards.
X. AG did not publish an ad hoc announcement at that time, concluding the investigation had not yielded reliable results. In particular, the company determined that the likelihood of needing to restate prior financials was not “more likely than not”.
The investigation continued. A week before the eventual Ad hoc Announcement, investigation counsel advised the company that, based on further investigations, it was now “more likely than not” that certain bookings were materially noncompliant with applicable accounting standards. This change in assessment prompted the company to issue the Ad hoc Announcement.
Following the Ad hoc Announcement, the investigation was expanded further. Upon conclusion, the company issued a second ad hoc announcement confirming that a restatement of previously published financial statements was required.
b) Procedural Posture
After preliminary investigations, SER submitted a sanctions proposal to the Sanctions Commission of SIX Group AG (the Sanctions Commission), alleging in particular a grossly negligent violation of the ad hoc disclosure obligations under article 53 LR. The allegations focused on X. AG‘s failure to disclose at the time of the Status Update in an ad hoc announcement that an investigation into accounting practices prompted by whistleblower reports was ongoing and that a restatement of previously published financial figures would likely be necessary.
The Sanctions Commission found that X. AG had grossly negligently breached its ad hoc disclosure obligations in connection with the Ad hoc Announcement by failing to publish already at the time of the Status Update an ad hoc announcement that an investigation into accounting matters related to whistleblower reports was ongoing and that such investigation had produced concrete interim findings.
X. AG subsequently challenged the Sanctions Commission‘s decision by initiating arbitration proceedings. On 28 February 2025, the Tribunal rendered its Award, declaring that the company had not been required to issue an ad hoc announcement at the time of the Status Update and that the Ad hoc Announcement had been published in a timely manner.
3) Ad Hoc Disclosure Threshold in Internal Investigations
a) The Tribunal’s Holding in X. AG v. SER
The Tribunal first addressed the issue of the relevant disclosure standard. It recalled that pursuant to article 53(2) LR an issuer must disclose a price-sensitive fact by means of an ad hoc announcement as soon as it becomes aware of the fact “in its essential points” – even if it does not yet know all the details of such fact. The Tribunal further noted that, under article 53(2) LR and article 5 DAH and the Sanctions Commission‘s practice, knowledge of the fact exists when: (i) a member of management or a non-executive board member possesses the knowledge, and (ii) one of these individuals has knowledge of the essential points of the fact (Award, at paras. 270 et seq.).
The Tribunal then turned to the question of the disclosure threshold in evolving factual situations (Award, at para. 272; emphasis added, unofficial translation of German original):
“The question of how long an issuer can delay publication is subject to controversy among the parties, especially concerning the ‘concept of staggered disclosure in extended or complex factual situations.’ To avoid uncertainties and collateral damage for both the company and the capital market, the management should be granted the right to conduct the necessary internal investigations with due haste.”
Relying in particular on a quote from Peter Böckli (Ad hoc-Publizität, Kursrelevanz als Kernkriterium der Bekanntgabepflicht, 86(1) Swiss Review of Business and Financial Market Law 2 (2014), at p. 10 et seq.), the Tribunal held (Award, at paras. 273 et seqq.; emphasis added, unofficial translation of German original):
“[X. AG] must be afforded an adequate period for investigation to determine whether the potential allegations raised (notably regarding intentional misstatements and improper EBITDA steering) can be substantiated. In complex factual situations, internal investigations may indeed require a longer period, especially when extensive and intricate investigations are necessary. Therefore, it is generally legitimate and within the issuer’s duly exercised discretion (see below, […]) for a company to wait until it is established with preponderant probability [überwiegende Wahrscheinlichkeit] that price-sensitive facts exist before proceeding with disclosure. This approach prevents the market from being prematurely misinformed about facts and that announcements may later need to be corrected or retracted.
It is in the interest of all stakeholders that an ad hoc disclosure obligation regarding a specific event is not triggered solely because the occurrence of the event is possible, i.e., falls within a low probability range. Only in this way can the risk be limited that the market must later be corrected with further ad hoc announcements.
Although article 53 LR aims to ensure capital market transparency, it does not require the issuer to inundate the market with indications, rumors, personal opinions, suspicions or facts that are not yet sufficiently substantiated (in the sense of preponderant probability). In cases of uncertain or unclear factual situations, i.e., situations that could have occurred in one way or another, the issuer is obliged, in the interest of market functionality, to conduct further investigations and to either obtain sufficiently substantiated information from indications, rumors, opinions, suspicions, etc., or to refute them. To qualify as a fact, the information must have reached ‘a sufficient degree of substantiation so that the publication of the information does not mislead market participants’. A price-sensitive fact ‘can only be assumed when the company’s decision-making process has been concluded or has progressed to such an extent that the market is not misled by the publication’.
The question of whether a fact, whose occurrence was known to [X. AG] on [the date of the Status Update], merely as ‘possible’ (and not preponderantly probable), later turned out to be untrue or not, is irrelevant in this context. As previously noted, the assessment of the ad hoc disclosure obligation is exclusively based on the ex-ante perspective. So-called hindsight bias must be avoided.”
Applied to the specific circumstances of X. AG, the Tribunal found that at the time of the Status Update, it was not established with preponderant probability (“more likely than not”) that the company had engaged in improper accounting practices and that, at that stage, there were no potentially price-sensitive facts established in their essential points with preponderant probability based on the whistleblower reports. Therefore, in the Tribunal‘s view, X. AG was entitled to await the outcome of further investigative steps before proceeding with the publication of an ad hoc announcement (Award, at paras. 313 et seqq.).
The Tribunal considered that an investigation into the accounting practices of a large multinational corporation – which can encompass hundreds of bookings, millions of underlying documents and data points, and dozens of employees in a variety of countries – was an endeavor of immense complexity. At the time of the Status Update, the work of X. AG‘s forensic accounting review advisors was still at a very preliminary stage. The Tribunal further found that information gathered from interviews with employees supported the assessment of investigation counsel and the forensic accounting review advisors that further investigations were necessary before the relevant facts could be sufficiently substantiated (Award, at para. 340 et seqq.).
In particular, the Tribunal reasoned that the bookings identified as potentially problematic in the Status Update were only investigated after that date to determine whether or not they constituted improper misstatements necessitating a restatement. As of the time of the Status Update, these bookings could not yet be classified with a preponderant probability as improper misstatements, nor was there a preponderant probability at that time that a restatement would be necessary (Award, at paras. 361 et seqq.).
Finally, the Tribunal rejected SER’s position that the mere fact that an internal investigation is ongoing could trigger an ad hoc disclosure obligation (Award, at paras. 415 et seq.; emphasis added, unofficial translation of German original):
“The Tribunal notes that an internal investigation does not constitute a per se basis for an ad hoc disclosure obligation; what matters are always the particular circumstances and, in particular, whether the issuer has knowledge of a price-sensitive fact in its essential points. [X. AG] was required to assess whether the existing indications had been sufficiently clarified and substantiated, respectively, whether a potentially price-sensitive fact was established with a preponderant probability.
The investigation itself is precisely the means of determining whether a (price-sensitive) fact exists, which is why the investigation as such cannot trigger a disclosure obligation. In this case, it is clear that as of [the time of the Status Update], the investigation with the external experts was still in its initial phase, and only preliminary and fragmentary investigation results were available at that time. According to the experts – whose assessment [X. AG] adopted – these results needed to be further examined.”
b) Discussion
The Award provides welcome guidance on the threshold for ad hoc disclosure in the context of internal investigations and evolving factual situations more broadly by establishing the criterion of preponderant probability (“more likely than not”) as the relevant standard.
Thus, the Award departs from the previous enforcement practice of SER and the Sanctions Commission. SER had endorsed the concept of staggered disclosure or a “step-by-step publication strategy” in the DAH Guideline (DAH Guideline, at para. 41: “In the case of complex events […] SER recommends to inform the public in several stages with ad hoc announcements”). The Award also overrules the Sanctions Commission‘s position that in cases of doubt, it is better to publish a prompt ad hoc announcement that clearly highlights the remaining uncertainties.
By highlighting the risks and potential harm of premature disclosure, the Tribunal clarified that the concept of staggered disclosure runs counter to the objectives of ad hoc disclosure rules, particularly in the context of internal investigations. Indeed, the purpose of ad hoc disclosure is to ensure that issuers provide information to the market “in a truthful, clear, and complete manner” (article 1 DAH). While this favors timely market information, it does not mandate premature disclosure. Rather, there are legitimate interests on the side of both issuers and investors in delaying disclosure until the issuer has made sufficient progress in its investigation of the facts. Premature announcements of preliminary findings or low-probability events carry the risk of misleading the market and causing significant and unwarranted damage for both the company and the capital market.
More specifically, disclosing partial or preliminary information prematurely may result in a yo-yo effect on the share price – initially swinging in one direction due to incomplete information, only to later correct when updates follow. However, staggered, premature ad hoc announcements can lead to fundamental market uncertainty. There is therefore no guarantee that the share price will recover quickly, which can entail that the issuer‘s market capitalization could suffer lasting damage from a premature ad hoc announcement. At the same time, the transparency gain from premature disclosure is limited, as the information is still provisional and may fundamentally change. In that sense, the Tribunal‘s ruling also confirms that the ad hoc disclosure rules are not intended to pursue market transparency at all costs.
Moreover, the Award also aligns with the latest developments in the European Union. Originally, the Court of Justice of the European Union had held that an ad hoc disclosure obligation could arise at any stage in an evolving process, i.e., not just at its final outcome, if an intermediate step was sufficiently precise and likely to have a significant effect on the share price (CJEU, no. C‑19/11, Geltl v. Daimler). This meant that issuers could be required to disclose information at earlier stages, before the final outcome was certain. However, calls for more mature and accurate information for investors and for more legal certainty for issuers have since led to an amendment of the Market Abuse Regulation (MAR), which will enter into force in 2026. Under this amendment, “intermediate steps in protracted processes” are now exempt from ad hoc disclosure obligations; issuers will only need to disclose information concerning the final circumstances or event that the process is intended to achieve or results in (article 17(4a) MAR).
Finally, the Tribunal expressly acknowledged the risk of hindsight bias in SER’s and the Sanctions Commission‘s review of issuers’ decisions on ad hoc disclosures. In cognitive psychology, hindsight bias refers to the tendency to overestimate the predictability of an event after it has already occurred. Article 4(2) DAH addresses this risk by stipulating that the assessment of price relevance must always be made from an ex ante perspective (“prior to the event becoming known or being announced”). In the X. AG v. SER arbitration, SER argued that the share price drop and media reports following the Ad hoc Announcement indicated that a price-sensitive fact had already existed at the time of the Status Update. The Tribunal explicitly rejected this position.
4) Protection of the Issuer’s Duly Exercised Discretion in Ad hoc Disclosure
a) The Tribunal’s Holding in X. AG v. SER
The Tribunal further addressed the question of whether article 53 LR and the DAH afford issuers a margin of discretion in determining whether a price-sensitive fact exists and specified the contours of this margin. In the same context, the tribunal also discussed whether the scope of subsequent regulatory or arbitral review of the issuer‘s determination is unlimited (SER‘s position) or limited (X. AG‘s position). Relying in particular on a publication by Andreas Müller and Anna Peter (Revidierte Regularien zur Ad hoc-Publizität, 16(2) Swiss Review of Corporate & Capital Markets Law 149 (2021), at p. 157), the Tribunal held (Award, at paras. 284 et seqq.; emphasis added, unofficial translation of German original):
“According to article 4(3) RAhP, as mentioned, the issuer must make its decision regarding the price sensitivity of a fact using its duly exercised discretion. The regulations issued by SER explicitly grant the issuer a margin of discretion in this regard. A violation of the ad hoc disclosure obligation can therefore only occur in cases of an abuse or improper exercise of that discretion. [SER] acknowledges that issuers are indeed entitled to a certain level of discretion when assessing forward-looking elements related to the ad hoc disclosure obligation.
In scholarly writing, drawing on the Swiss Federal Supreme Court’s case law regarding the ‘business judgment rule’ and its counterpart for legal interpretation decisions, the ‘legal judgment rule’, it has been argued that an issuer exercises its discretion properly ‘if (1) in terms of form, a plausible decision-making process is followed, and (2) in terms of substance, the available information is reasonably considered, and the assessment of price sensitivity is not carried out based on clearly unsuitable criteria’. These authors further note: ‘In any case, SER must not replace the issuer’s ex-ante discretion with its own ex-post judgment during a review of the decision. Only a clearly improper exercise of discretion should give rise to sanctions against the issuer.’
[…]
The arbitral tribunal notes that the stock exchange regulations undisputedly grant the issuer a certain margin of discretion in assessing the price sensitivity of a fact, and that this decision must be made within the bounds of duly exercised discretion. According to the tribunal, an issuer generally exercises its discretion properly if: (1) a plausible decision-making process is followed, and (2) the available information is reasonably considered and the assessment of price sensitivity is carried out on the basis of ‘suitable criteria’. By the same token, in evaluating whether certain criteria are ‘suitable’ or adequate, the issuer must also be granted a certain margin of discretion. [Footnote in the Award: This approach does not necessarily coincide with the doctrine mentioned above, according to which a violation of the ad hoc obligation can only be affirmed if, ‘in terms of substance, […] the assessment of price sensitivity is not carried out based on clearly inadequate criteria’.] Determining whether the issuer has ‘knowledge of a fact in its essential points’ (article 5 DAH) likewise ultimately requires a discretionary judgment. Once the issuer has established such a criterion, it is generally expected to apply it consistently.
If SER were granted the authority to conduct a full substantive review of the decision, the discretion afforded to the issuer would be eroded.”
Applied to the specific circumstances of X. AG, the Tribunal found that the company had duly exercised its discretion, consistent with the two-prong test set out above, when it decided not to publish an ad hoc announcement at the time of the Status Update. In terms of form, the Tribunal held that X. AG had followed a plausible decision-making process by engaging leading external experts to assess the factual and legal situation regarding the existence of an ad hoc disclosure obligation. These experts thoroughly examined the allegations raised by the whistleblowers reports through diligent investigation measures. At the time of the Status Update, the company shared the reasonable views of its external experts that further investigative steps were required to sufficiently clarify the facts relevant to determining an ad hoc disclosure obligation. Accordingly, the Tribunal concluded that the company had undertaken a plausible decision-making process in terms of form (Award, at paras. 291 et seqq.).
In terms of substance, the Tribunal found that X. AG had also appropriately considered all available information and assessed the existence of a price-sensitive fact based on suitable criteria – the criterion of preponderant probability (see above). In the Tribunal’s view, it was reasonable to examine whether there was a price-sensitive fact that was sufficiently substantiated using this standard. Despite certain indications of suspicion in the initial findings of the investigation presented in the Status Update, the company reasonably concluded that the forensic investigation as of that date was not yet sufficiently advanced to establish with preponderant probability whether or not improper accounting practices had occurred, or whether the integrity of X. AG’s employees was no longer ensured. This view had also been confirmed by the company‘s disclosure counsel (Award, at paras. 313 et seqq.).
The Tribunal concluded that X. AG had therefore acted within the bounds of its duly exercised discretion by deciding, under the given circumstances and in alignment with its professional advisors, to await the outcome of further investigative steps to ensure the reliability of the whistleblower allegations. Accordingly, the company correctly concluded that as of the time of the Status Update, there was no obligation to issue an ad hoc announcement and that the relevant factual elements needed to be further examined through continued investigation.
Finally, the Tribunal also examined whether X. AG’s Ad hoc Announcement, published on a Monday, was belated because the company had been informed a week before, also on a Monday, that further investigations conducted since the Status Update showed that it was “more likely than not” that there had been improper accounting practices. The Tribunal found – again citing Peter Böckli (op. cit.) – that while the threshold of preponderant probability was thereby met, an issuer must be granted “a reasonable short period to discuss the results internally“ and to consult the competent corporate bodies. “As a rule, at least three to five calendar days are considered reasonable” (Award, at para. 422).
In X. AG’s case, this meant that the board of directors had to be consulted. The board meeting took place on the Sunday before the Ad hoc Announcement. In this specific instance, the Tribunal also found that the company was entitled to await the meeting with its auditor on Friday. Therefore, the Tribunal concluded that X. AG acted within the bounds of its duly exercised discretion to wait for these meetings before proceeding with the ad hoc disclosure (Award, at paras. 423 et seqq.).
b) Discussion
The Award in X. AG v. SER provides important clarification on the level of scrutiny that SER and the judicial bodies of SIX Swiss Exchange can apply when reviewing an issuer’s decision whether to publish an ad hoc announcement. By confirming that article 53 LR and the DAH afford issuers a margin of discretion in making this determination, the Tribunal considerably limits the scope of subsequent regulatory and arbitral review. SER‘s position that the decision must be subject to a full and unrestricted review was therefore rejected by the Tribunal and can no longer be considered good law in light of this ruling.
This is a particularly welcome development for issuers, marking the first time that a judicial body of SIX Swiss Exchange has explicitly recognized this margin of discretion. Notably, the Tribunal found that this discretion is not limited to the issuer‘s assessment of price sensitivity, as a narrow reading of article 4(3) DAH might suggest, but also extends to determining whether the issuer has knowledge of a fact in its essential points under article 5 DAH, as well as to the choice of suitable criteria used in assessing price sensitivity.
The Tribunal‘s reasoning further implies that the issuer‘s discretion also encompasses the steps required and time needed for the internal deliberation process with the competent corporate bodies prior to issuing an ad hoc announcement, with a minimum period of three to five days granted in circumstances such as the X. AG v. SER case. This aligns with article 4(3) DAH, which provides that issuers may take into account the company‘s internal allocation of responsibilities.
The Award also contributes to the broader debate about whether issuers can invoke the business or legal judgment rule, as posited in legal commentary and the travaux préparatoires of the DAH (see, e.g., Andreas Müller & Anna Peter, op. cit., and, already earlier, Frank Gerhard, Business Judgment Rule und Rechtsrisiken / Anerkennung einer Legal Judgment Rule für rechtlich gebundene Entscheide von Unternehmensorganen, 88(3) Swiss Review of Business and Financial Market Law 254 [2016]). In 2023, an arbitral tribunal found in the context of the financial reporting requirements under article 51 LR that the business judgment rule applies exclusively to business decisions but not to decisions concerning supervisory or organizational duties, which include compliance with accounting rules. Such decisions remain fully reviewable. Further, said tribunal noted that the business judgment rule is relevant for assessing liability of corporate bodies, not for determining whether the company itself breached its regulatory obligations (final award of Dec. 20, 2022, Tornos Holding AG v. SER, at para. 4.4.2). The Swiss Federal Supreme Court subsequently found this assessment to be at least not arbitrary (SFSC, no. 4A_63/2023, at para. 4.4.3).
The Tribunal in X. AG v. SER chose a different approach, basing its reasoning directly on an interpretation of article 53 and the DAH. Accordingly, it held that there was no need to consider whether the corporate law doctrines of the business or legal judgment rule should be applied by analogy (Award, at para. 288).
In its result, however, the Tribunal’s holding on the issuer’s margin of discretion and its two-prong test for assessing the exercise of that discretion share important structural similarities with the business and legal judgment rules. Just like these doctrines, it shifts the focus away from a full substantive review of the issuer’s decision to a “procedural” assessment of whether the issuer has duly exercised its discretion. Moreover, both the business and legal judgment rules and protection of the issuer‘s duly exercised discretion ultimately concern the ex post review of a complex decision made under inherently uncertain conditions and involving forward-looking elements.
In that sense, the Tribunal respects that only the issuer itself is in the “hot seat” tasked with the weighty responsibility of deciding ex ante and under time pressure whether to make an ad hoc announcement.
Finally, the Tribunal’s holding is consistent with the explanatory materials of the ongoing FMIA revision, which explicitly state that issuers already possess a margin of discretion under existing law in assessing whether information triggers an ad hoc disclosure obligation. Because this principle is a fundamental aspect of the concept of ad hoc disclosure, it is also intended to remain in the revised FMIA (see Explanatory Report on the Draft Amendment to the Financial Market Infrastructure Act, June 2024, accessible at: https://www.newsd.admin.ch/newsd/message/attachments/88244.pdf, at p. 31).
5) Key Takeaways and Precedential Value of X. AG v. SER
The Award in X. AG v. SER establishes an important precedent in the area of ad hoc disclosure, largely rejecting the concept of staggered disclosure – at least in the context of internal investigations and similar complex or evolving situations, and in the manner promulgated by SER in the past – and establishing the principle of preponderant probability (“more likely than not”) as the applicable threshold triggering an ad hoc disclosure. Moreover, it confirms the issuer‘s discretion in determining whether information is subject to an ad hoc disclosure obligation, extends this discretion to, among other things, the question of whether the issuer has knowledge of a fact in its essential points pursuant to article 5 DAH, and limits SER‘s review powers accordingly.
Although arbitral awards are generally considered to have no precedential value and only effects inter partes, article 34 FMIA and article 1 LR enshrine the principle of equal treatment of issuers. This principle obliges SER and all other bodies of SIX Swiss Exchange to ensure that all issuers are treated equally, not only when adopting regulations but also when applying them in their enforcement practice (see, e.g., Roland Truffer, Commentary ad article 34 FMIA, in: Watter & Bahar [eds.], Basel Commentary FINMASA / FMIA , 3rd ed. [2019], at para. 6). This requirement underscores that even arbitral awards, while formally binding only on the parties involved, must be considered by SER and the Sanctions Commission in their future enforcement practice to preserve the uniformity and integrity of the regulatory framework.
In this way, the Tribunal’s holding in X. AG v. SER will invariably shape how ad hoc disclosure obligations in evolving factual situations are assessed going forward, fostering greater predictability and legal certainty for issuers. In light of this, the authors suggest that SER would be well advised to update the DAH Guideline accordingly at the earliest opportunity.
Frank Gerhard (frank.gerhard@homburger.ch)
Mariella Orelli (mariella.orelli@homburger.ch)
Micha Fankhauser (micha.fankhauser@homburger.ch)
Richard G. Allemann (richard.allemann@homburger.ch)