Securities

ETFs and ETPs have grown to over USD 7 trillion in assets under management (AuM) of which ETPs contributed USD 1 trillion. To reflect on selected key legal aspects which are relevant in the course of this boom the article at hand examines the regulatory framework for ETPs in Switzerland with a focus on structuring as well as listing requirements. It further highlights the role of special purpose vehicles and collateralization including recent developments such as the SIX Digital Collateral Service (DCS) for cryptocurrency collateral.

A shift of paradigm in legislation is normally triggered by flaws or loopholes in the substance of the existing legislation. Looking at the draft bill for the revision of the Financial Market Infrastructure Act (FMIA), this does not seem to apply to the Swiss government, which proposes to change the current regime of disclosure obligations of Swiss listed companies for the sake of changing it from self-regulation to government regulation.  

The draft changes proposed in the consultation on the amendment to the Financial Market Infrastructure Act (FMIA) seek to transfer issuer obligations from self-regulation by the stock exchange(s) to the FMIA and, associated with such transfer, the assignment of competencies from Swiss stock exchanges to FINMA. Among these issuer duties is the obligation to report management transactions. In addition, an explicit issuer obligation to maintain insider lists is introduced into the FMIA. The proposed changes would, if enacted, constitute a shift of paradigm in issuer regulation in Switzerland: The tradition of self-regulation of stock exchanges would cave in favor of…

The Federal Council recently concluded a public consultation on proposed amendments to the Financial Market Infrastructure Act (FMIA). The proposal consists of a wide range of amendments and modernizations covering topics and rules on financial market infrastructures, takeover law, management transactions, ad hoc publicity, insider and derivatives trading. The proposed amendments also include amendments to the Swiss regime on disclosure of significant shareholdings. Specifically, in order to reduce the administrative burden, the notification duty should in the future only apply if the threshold of 5% is reached, exceeded or fallen below (as opposed to the current 3% initial threshold). In…

The Swiss system for major shareholder disclosures requires investors to report holdings crossing thresholds (e.g., 3%, 5%, 10%) within four trading days. While these disclosures can significantly impact stock prices, the system is complex and prone to errors, partly due to intricate rules and limited guidance from disclosure offices. Violations are treated as misdemeanors, punishable by fines of up to CHF 10 million, though settlements are common to avoid criminal records. However, the system struggles to improve compliance, with around 5% of reports leading to complaints annually. Key issues include excessive fine ranges, a lack of preventive effects, and limited…

On 26 June 2024, the Swiss Federal Council launched a public consultation (Vernehmlassung) on its proposals to amend the Swiss non-financial reporting obligations. The changes aim to align the Swiss requirements with the EU Corporate Sustainability Reporting Directive (CSRD).  This article provides an overview of and comments on the proposed key changes which include, inter alia, an extension of the scope of the non-financial reporting and a broader range of topics to be covered in the reports, a mandatory external audit of the report, and a requirement to comply with the EU Sustainability Reporting Standards (ESRS) or an equivalent standard…

Sustainability in the financial sector has become increasingly important, both nationally and internationally. Governments and companies worldwide are stepping up their efforts and commitments to combat climate change. Switzerland is no exception to this trend and aims to achieve CO2 neutrality by 2050. This article examines the diverse spectrum of sustainable finance instruments that are commonly utilized in Switzerland (see section 2), describes some challenges (see section 3) and provides an overview of the Swiss legal and the related regulatory framework (see section 4). By Philipp Otto / Christian Schneiter (Reference: CapLaw-2024-61)

In 2024, most companies listed in Switzerland were obliged for the first time to publish a report on non-financial matters in accordance with articles 964a-c of the Code of Obligations. The following article describes the related issues primarily discussed in connection with this year’s AGM season and examines whether clear trends and market practice have already developed in this regard.  By Thomas Reutter / Philippe Weber (Reference: CapLaw-2024-36)

Convertible bonds may be an attractive financing instrument for listed companies, particularly for companies with a high growth potential. Creating a share lending facility may help issuers to increase the size and improve the pricing terms of their convertible bonds. This article aims to provide a brief overview of how such facilities may be structured and typical stumbling blocks that must be considered and addressed. By Sandro Fehlmann (Reference: CapLaw-2024-19)