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)

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)

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)

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)

This year’s AGM season is marked by the recent entry into force of the Swiss Corporate Law Reform and the need for companies to adapt their articles of association and decide whether and how to make use of new concepts such as the capital band introduced by the new law. While it is too early for a definitive assessment of market trends and practices, the authors will share some initial observations. An in-depth review and analysis of the 2023 AGM season will follow in a later issue of Caplaw.

By Daniel Raun / Thomas U. Reutter (Reference: CapLaw-2023-03)

On 30 January 2023, the Swiss regulator FINMA published guidance 02/2023 with which it provided an update on the status of the licensing process for portfolio managers and trustees. At the same time, FINMA gave an outlook on its enforcement activities in 2023, which serves as a clear warning for those portfolio managers and trustees that continue to operate their business without the appropriate FINMA license.

By Patrick Schärli (Reference: CapLaw-2023-04)

Over recent years ESG (environmental, social and governance) matters have increasingly become the focus of a wide-range of investors, and corporates are expected to comprehensively report on these type of topics. In line with this general development and on the back of the so-called “Responsible Business Initiative”, Swiss corporate law has been amended over the recent years to provide for specific ESG-related due diligence obligations and reporting requirements. These reporting requirements will apply for most part for the first time for the 2023 financial year (with some of the rules already applying to the 2022 financial year). This article provides and overview of the Swiss corporate law ESG due diligence and reporting obligations.

By Patrick Schärli (Reference: CapLaw-2022-37)

On 25 September 2020, the Swiss parliament adopted the entirely revised Data Protection Act (revDPA), which largely follows the regime provided by the EU General Data Protection Regulation (GDPR) with very limited Swiss finishes. On 3 March 2022, the target date for entering into force of the revDPA has been set for 1 September 2023. The revDPA will be very relevant for Swiss financial institutions, which are already today subject to a multitude of regulations, including regulations that (partially) govern processing of personal data and outsourcing. However, the revDPA will govern data processing in a comprehensive manner and impact outsourcings by financial institutions significantly. This article provides guidance to financial institutions which outsource (or desire to outsource) business areas to professional service providers and sets out the most relevant requirements of the revDPA that such institutions need to take into account above and beyond what already applies out of various financial market related regulations to which they are subject to.

By Leo Rusterholz (Reference: CapLaw-2022-15)

Collective redress has been one of the most debated topics in the field of civil procedure over the last decades in both Switzerland and the European Union. Recently, there have been several new developments: In the European Union, member states are in the process of adopting national laws implementing the EU directive on collective redress, with the deadline for implementation of December 2022 fast approaching. In Switzerland, the Federal Council submitted its proposal for collective redress measures to Parliament in December 2021, where it is currently considered in the legal commissions of both chambers of the Parliament. This article sets out and assesses key points of the Federal Council’s proposal against the background of the collective redress measures in the European Union.

By Thomas Werlen / Konstantin Oppolzer / Jonas Hertner (Reference: CapLaw-2022-16)