On 11 May 2016, the Swiss Federal Council adopted an amendment to the Capital Adequacy Ordinance which sets out the new capital requirements for systemically important banks and introduces a new gone concern requirement for globally systemically important banks in line with G20 standards as promulgated by the Financial Stability Board. It further defines the required features for capital instruments qualifying for the gone concern requirement (so-called “Bail-in Bonds”) and sets out grandfathering provisions for outstanding instruments. The revised Capital Adequacy Ordinance came into effect on 1 July 2016, subject to phase-in and grandfathering provisions as described hereinafter.

By Daniel Hulmann / Stefan Kramer / Benjamin Leisinger (Reference: CapLaw-2016-25)