Securities

On 26 March 2015, Credit Suisse issued USD 4 billion senior unsecured debt that intends to be eligible to meet the Financial Stability Board’s proposal and envisaged future Swiss standards for instruments counting towards a total loss absorbency capacity (TLAC) requirement. By René Bösch/Benjamin Leisinger (Reference: CapLaw-2015-15) 1) Background and Developments a) The Idea In January 2010, in a guest article in The Economist, Paul Calello, the late head of Credit Suisse AG’s investment bank division, and Wilson Ervin, Credit Suisse AG’s former chief risk offi cer, proposed a new process for resolving failing banks. Their article entitled From bail-out…

Proxy adviser have now come to play an important role for listed companies in Switzerland with a significant free float. The breadth of the phenomenon is relatively recent and coincided with the enactment and entry into force of the Ordinance against Excessive Compensation for listed companies (OaEC; Verordnung gegen übermässige Vergütungen in börsenkotierten Unternehmen (VegüV)), which mandates, inter alia, a binding shareholder resolution on say on pay. The increased power of proxy advisers also gives rise to some concerns and to the question of how to address them. By Thomas U. Reutter (Reference: CapLaw-2015-16)

SIX Exchange Regulation, the regulatory body of the main Swiss stock exchange, has confirmed plans to overhaul its regulatory listing standards. The sub-division into Main Standard and Domestic Standard will be abolished and issuers may choose between an International and a National or Swiss Standard. The only major difference between the two new regimes will be the applicable financial reporting standard. IFRS or US GAAP must be used on the International Standard. Issuers who do not wish to report under either of these two standards, but opt for Swiss GAAP FER instead, will be listed on the National Standard. The…

As the free flow of funds in and out of China is still regulated by the Chinese government, the Chinese financial market is basically closed to foreign investors. Although there are visible steps towards opening China’s tightly controlled capital markets, the length of time it will take for China to fully open up its financial system can only be estimated. In the meantime, participants in global financial markets will increasingly focus on the development of the country’s offshore renminbi market. This article gives an overview of the offshore renminbi denominated bonds at the center of China’s master plan to internationalize…

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…

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…

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)

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…

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…