Category Archives: Securities

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.

Market Abuse and Takeover Law – A New Start under Swiss Law

Market Abuse and Takeover Law – A New Start under Swiss Law

On 28 September 2012, the Swiss parliament passed a bill amending the Stock Exchange Act (SESTA). The amendment, which is due to enter in force on 1 April 2013, introduces fundamental changes to market abuse and takeover law, as well as other minor revisions of Swiss securities laws: it overhauls the market abuse regulations by introducing a new administrative enforcement regime and introducing heavier criminal sanctions for insider dealing and market manipulation. Second, it extends the scope of application of Swiss takeover law and disclosure rules, while introducing a strict regime of equal treatment of investors in connection with mandatory bids.

Covered Bonds

While traditional (statutory) Pfandbriefe still dominate the Swiss covered bond market, the avenue of structured (contractual) covered bonds has recently been explored when first UBS (in 2009) and then Credit Suisse (in 2010) established their respective covered bond programs and presents an alternative for Swiss mortgage lenders seeking for flexibility and an improved access to international institutional investors. This article describes the key features of Swiss structured covered bonds.

Tailor-Made Bond Financing Opportunities: Tapping the German High Yield Retail Market — The “Schaeffler” Precedent

In times of aggravated credit financing and continuing volatility in the markets, issuing high-yield corporate debt to retail investors can prove a feasible way of accessing money—for small, medium and even large enterprises. Historically, the purchase of individual bonds was beyond the reach of most private investors because the minimum amount needed to trade was typically € 50,000 (equivalent) or even € 100,000 (equivalent), but the retail bond market now provides direct access to corporate bonds for trading in retail-friendly increments of around € 1,000 (equivalent). Making corporate bonds available for lower amounts is a response to strong private investor demand. For instance, Schaeffler Group’s1 € 300 million 6.75% senior secured notes offering in denominations of € 1,000 to retail investors and an additional approximately € 26 million 6.75% senior secured notes offering to Schaeffler employees in Germany, which both completed in July 2012, serve as a paradigm for a high yield bond offering issued to retail investors. The transaction has showcased an innovative structure that combines an offering to retail investors in Germany and Luxembourg with a separate employee offering, thereby also resolving concerns that generally arise in the context of retail offerings. As the first single B rated credit high yield bond offering directed at retail investors, the deal is truly a market first.

The JOBS Act: Implications for Non-US Issuers

This article outlines key features of the recently-signed Jumpstart Our Business Startups Act (JOBS Act), which is intended to streamline access to the US capital markets for a range of issuers. Among other developments, the JOBS Act reduces disclosure burdens, eases requirements for initial public offerings for certain companies, relaxes restrictions on communications around securities offerings and increases minimum thresholds for mandatory SEC reporting.

Swiss Financial Market Supervisory Authority (FINMA) Position Paper on Distribution Rules

In the aftermath of the turmoil on the global financial markets which has become prominently known and felt since the year 2008, FINMA, first in its discussion paper on regulating the production and distribution of financial products to retail clients (Distribution Report) and now in its position paper on the regulation of the production and distribution of financial products (Position Paper on Distribution Rules) has made proposals on how to better protect clients investing in financial products. This article provides a summary overview over the 18 key points which FINMA makes in its Position Paper on Distribution Rules and, to some extent, puts them into perspective.

The EU Prospectus Reform 2012 and Consequences for Structured Products Prospectuses

Seven years after the entry into force of the harmonized EU prospectus regime with the EU Prospectus Directive 2003/71/EC (PD) and the EU Prospectus Regulation EC/809/2004 (PR), a major revision of the EU prospectus regime will enter into force on 1 July 2012 when EU member states will be required to implement EU Directive 2010/73/EU (Amending PD) into national law and the amendments to the PR set out in the delegated EU Regulation EU/486/2012 (Amending PR) will enter into force. Many of the changes will affect the prospectus documentation for structured products disproportionately, as one focus point of the change targets base prospectuses and significantly restricts the permitted contents of final terms while another focus point targets the summary which will gain in significance and become the key source of information for retail investors. This article analyzes selected areas of change of particular relevance for structured product issuers and describes initial trends how to cope with the new requirements.

Amendments to the EU Prospectus Directive — A Status Update

In late 2010, we reported on certain key changes to the EU Prospectus Directive (2003/71/EC) as a result of EU Directive 2010/73/EU (Amending Directive) of which Swiss issuers and capital markets practitioners should be aware. See CapLaw-2010-51. Once implemented (i.e. transposed into national law) by the various member states of the European Economic Area (EEA), the amendments will have a significant impact on both debt and equity offerings within the EEA. The deadline for implementation is 1 July 2012.

By the same deadline, the European Commission (Commission) must adopt certain delegated acts, i.e. corresponding amendments to Commission Regulation (EC) 809/2044 (Prospectus Regulation) to implement the new framework contemplated by the Amending Directive (Amending Regulation). Due to the need to provide legal clarity to market actors, the Amending Regulation is expected to be published in the Official Journal of the European Union by 1 July 2012. The Commission is relying on the European Securities and Markets Authority (ESMA) for technical advice on the amendments. ESMA has submitted the first and second part of its final advice to the Commission on 4 October 2011 and 29 February 2012, respectively, and the Commission has published a draft of the Amending Regulation on 30 March 2012.

New Guide on Going Public on SIX Swiss Exchange

In late 2011, SIX Swiss Exchange published a comprehensive guide on Going Public on SIX Swiss Exchange. The guide is the product of a collaboration among some of the leading banks, law firms, audit companies and PR consultants in Switzerland, and provides valuable and interesting in-depth information for companies that are considering going public on SIX Swiss Exchange. The guide has a clear structure and short, but informative, articles complemented with helpful tables and overviews on all important topics that need to be considered in connection with a listing process.