In January 2020 the Financial Services Act and the Financial Services Ordinance entered into force and established comprehensive rules relating to prospectuses offering securities and the admission of securities to trading, which will apply to all types of financial instrument. This article discusses the 500-investor threshold's practical implications and compliance requirements and its expected impact on the Swiss market.
A recent Supreme Court decision concerned a case in which a relationship manager with a Swiss bank left said bank without the relevant bank's client being informed. The relationship manager continued to act on the client's behalf and gave investment orders to the bank, which the bank followed. The bulk of the court's decision discussed how the relevant damages suffered by the client must be alleged, contested and determined.
The new Financial Services Act and Financial Institutions Act came into force on 1 January 2020 together with their implementing ordinances. These laws oblige the Swiss Financial Market Supervisory Authority to license several new bodies, such as supervisory organisations responsible for supervising portfolio managers and trustees, as well as registration bodies responsible for maintaining client advisory registers.
The Takeover Board recently confirmed its case law on whether the obligation to make a public takeover offer may be fulfilled by completing a merger. However, the Takeover Board's arguments were based heavily on the specifics of the case at hand. It seems possible, if not likely, that the Takeover Board would have come to a different conclusion had the merger been structured differently.
The Swiss Financial Markets Supervisory Authority (FINMA) recently provided banks with clarifications on dealing with COVID-19 credits with federal guarantees within the framework of the capital and liquidity requirements and temporary exemptions relating to the leverage ratio. FINMA will likely further specify these guidelines or issue additional rules depending on the development of the current crisis.
Following the widespread outbreak of COVID-19 in Switzerland, the Federal Council implemented several emergency measures to mitigate the virus's economic impact. After weeks of pressure from the growing Swiss start-up ecosystem, the Federal Council acknowledged that start-ups had little or no access to the existing emergency aid and, considering their importance for the economy as a whole, stated that it would devise a liquidity support programme specifically designed for innovative start-ups.
The Swiss Financial Services Act's more liberal approach to transaction-related investment advice is a significant facilitation for financial service providers, but may also lead to uncertainties regarding its actual scope. This article aims to give some clarity on the sometimes difficult differentiation between the different types of investment advice and on the regulatory consequences of this categorisation.
The new Financial Services Act has introduced a number of regulatory obligations for financial service providers towards their clients. In particular, the new act contains a section entirely dedicated to the prevention and handling of conflicts of interest, dealing among other things with retrocessions and similar benefits received by financial service providers from third parties.
The COVID-19 pandemic and the measures against it taken by states all over the world will have serious consequences for the Swiss economy. To cushion the economic consequences of the spread of the coronavirus, the Federal Council recently approved a comprehensive package of measures worth Sfr32 billion. A key component of this package is government-backed loans to provide liquidity for businesses.
Under Swiss takeover law, the duty to launch a takeover offer is triggered when an acquirer of shares, whether acting directly, indirectly or in concert with third parties, acquires equity securities and thereby, in addition to the equity securities already owned, exceeds the threshold of 33.3% of the voting rights of a listed company. A recent Financial Market Supervisory Authority decision is a helpful reminder that the requirements for exemptions from the offer obligation must be assessed carefully on a case-by-case basis.
The new Financial Services Act and Financial Institutions Act came into force on 1 January 2020 together with the implementing ordinances. These laws oblige the Swiss Financial Market Supervisory Authority (FINMA) to pass a number of implementing provisions pertaining to selected, mainly technical issues. As a result, FINMA has created a new, streamlined Financial Institutions Ordinance and introduced amendments to several current FINMA ordinances and circulars.
The rules of conduct under the Federal Act on Financial Services (FinSA) are based on the EU Markets in Financial Instruments Directive (2004/39/EC) and the EU Markets in Financial Instruments Directive (2014/65/EU) and simplify market entry to the European Union for Swiss financial services providers. This article examines the FinSA's rules of conduct and the differences regarding the suitability and appropriateness duties under Swiss and EU legislation.
The Federal Council recently adopted a dispatch on the further improvement of the framework conditions for distributed ledger technology (DLT) and blockchain. The proposal aims to increase legal certainty, remove barriers for DLT-based applications and reduce the risk of abuse. This federal legislation, which is designed as framework legislation, proposes specific amendments to nine existing federal acts, covering both civil and financial market law.
The Federal Council recently decided to put the Swiss Financial Services Act and the Swiss Financial Institutions Act into effect on 1 January 2020 as the last part of the financial market regulations reform project. Concurrently, the Federal Council published the final versions of the implementing ordinances with some amendments compared with the previous draft versions published during the public consultation period.
Besides securing Switzerland's access to the EU financial markets, new objectives have emerged from advancing digitalisation and technological progress in the banking sector. One of those is undoubtedly Switzerland's goal of retaining its status as a leading country in the booming fintech and blockchain industry, which has led to significant developments towards a more flexible, technology-friendly legislative framework.
Until recently, Swiss regulations had no direct impact on the country's corporate lending market or the documentation of corporate loans. However, the increased capital and liquidity requirements that apply to banks in Switzerland have led to an increased focus on the collateral aspects of lending transactions to ensure that particular transactions can be treated as secured for regulatory purposes. This article provides an overview of the forms of security interest that can be taken over assets in Switzerland.
This article provides a short overview of the Financial Services Act's (FinSA's) new cross-sectoral client segmentation. The classification of clients under FinSA plays a significant role in the application of its rules of conduct, product documentation requirements and other provisions. The article also explains the main differences between client segmentation under the EU Markets in Financial Instruments Directive and FinSA.
In Swiss M&A practice, share deals remain the most common method of acquiring a business from a third party for several reasons. Due to strict Federal Supreme Court precedents, legal due diligence regarding share ownership and related compliance has always been a fundamental component of legal due diligence in Swiss share deals. Recent legislative changes have further increased the importance of thorough due diligence in this regard.
The Swiss Financial Market Supervisory Authority (FINMA) has published a supplement to its Guidelines on Initial Coin Offerings which outlines how it plans to apply provisions of Swiss supervisory law to projects involving so-called 'stablecoins'. The supplement was prompted by a steady increase in the number of stablecoin projects submitted to FINMA since 2018, including a submission from the Geneva-based Libra Association for an assessment of its Libra project under Swiss supervisory law.
The Federal Department of Finance has proposed changes to the draft Financial Services Ordinance (FinSO) and Financial Institutions Ordinance. A significant and welcome change in the draft FinSO is that key information documents for collective investment schemes can be written in English. The Federal Council will make the final decision on the wording of the ordinances and their entry into force in November 2019.