As part of its effort to meet EU-equivalent standards, Switzerland is in the process of implementing a comprehensive reform package which will fundamentally change the Swiss financial market regulatory framework and introduce the country's first harmonised and coherent prospectus regulation. The new regime will ensure that bond issuers will continue to have efficient and quick access to the Swiss debt capital market – one of the legislature's key goals.
The Federal Department of Finance recently announced that it was activating the measures adopted by the Swiss Federal Council to protect the Swiss stock exchange infrastructure in anticipation of the expiration of the stock market equivalence granted by the European Commission. Notably, the protective measures do not affect companies with registered offices in Switzerland that are listed and traded exclusively on exchanges outside Switzerland.
If everything goes according to plan, on 1 January 2020 Switzerland will have successfully overhauled its financial market legislation with the entry into force of the Financial Services Act and the Financial Institutions Act. An important element of the overhaul is the introduction of a new comprehensive and harmonised prospectus regime. However, the question remains as to whether non-public offerings as a species will survive in Switzerland.
In order to facilitate EU investment firms' access to trade Swiss shares on Swiss stock exchanges and limit the potential negative impact on the Swiss stock exchange infrastructure once Switzerland loses EU third-country equivalence, the Federal Council recently enacted emergency measures that will take effect from 1 January 2019. Any wilful or negligent breach of the recognition requirement under the new ordinance may result in criminal penalties against foreign trading venues and their responsible bodies.
The Disclosure Office of the SIX Exchange Regulation recently published useful guidance on its practice relating to certain provisions in the recently enacted Financial Market Infrastructure Act and the related implementing ordinance (the Swiss Financial Markets Supervisory Authority Financial Market Infrastructure Ordinance). The entry into force of the two federal laws has resulted in substantive amendments to some of the disclosure office's notices.
As in other jurisdictions, under Swiss law there are specific requirements relating to the disclosure of shareholdings and the actions of shareholders for companies whose equity securities are listed in whole or in part in Switzerland, including on Switzerland's main stock exchange, the SIX Swiss Exchange Ltd. This update aims to revisit and provide some practical guidance on certain shareholder disclosure duties in the context of Swiss rights offerings.
The SIX Group Regulatory Board recently published a new directive on the use of alternative performance measures. The directive applies to all issuers whose equity securities are listed on the SIX Swiss Exchange and whose registered offices are in Switzerland. Issuers whose registered office is not in Switzerland also fall within the scope of the directive if their equity securities are listed on the SIX Swiss Exchange, but not in their home country.
As part of Switzerland's efforts to meet EU equivalence requirements, the Swiss legislature is working on a new federal Financial Services Act. Under the act, which may enter into force as early as mid-2019, a comprehensive and harmonised prospectus regime will be introduced and will be applicable to all public offerings of financial instruments and all securities admitted to trading on a trading platform in Switzerland.
The disclosure requirements for significant shareholding in listed companies are governed by the Financial Markets Infrastructure Act and the Financial Market Supervisory Authority (FINMA) Financial Market Infrastructure Ordinance. FINMA recently opened a consultation process in relation to a proposed amendment to the ordinance. The proposed amendment relates to reporting obligations of disclosable interests held for the account of third parties by persons entrusted with discretionary voting powers.
The offering of financial instruments under the draft Financial Services Act is under debate before the Economic Affairs and Taxation Committee of the Council of the States. The draft act will introduce new prospectus and basic information document requirements regarding the offering of financial instruments. The draft act will also impose new rules of conduct on financial services providers, which must be complied with at the point of sale.
The Federal Council recently adopted the dispatch on the Financial Services Act, which governs the offering of financial instruments. The draft act constitutes a regulatory revolution for securities issuers, as well as manufacturers and distributors of financial instruments in Switzerland. The act will introduce new prospectus requirements with respect to all equity and debt securities.
The Federal Parliament recently adopted the Financial Markets Infrastructure Act and the Financial Market Infrastructure Ordinance. The act contains a body of rules aimed at ensuring, among other things, the proper functioning and transparency of securities markets. The new rules and regulations bring major changes, notably by redefining the scope of the persons subject to reporting obligations.
Swiss collective investment schemes regulation has undergone major changes to rectify deficiencies that became apparent as the financial crisis unravelled. Capital market regulation relies on self-regulatory organisations to implement certain rules and guidelines. Market participants must adopt the applicable rules and guidelines issued by self-regulatory organisations.
The Federal Council has submitted two legislative proposals for consultation, which will have a major impact on the Swiss financial industry and capital market. The Federal Financial Services Act provides for an entirely new foundation of a comprehensive prospectus requirement for all types of securities which are publicly offered or intended to be approved for trading in Switzerland.
Switzerland's collective investment schemes regulation recently underwent a major overhaul. The amended ordinance proposed by the Swiss Financial Market Supervisory Authority will bring it into line with the amended Collective Investment Schemes Act and Ordinance. It will provide further technical guidance on the implementation of the new regulation.
Swiss stock exchange regulation requires an investor to make a disclosure when its participation in a company whose shares are listed in Switzerland reaches, exceeds or falls below certain thresholds. In addition to the individual investor's disclosure obligations, a consolidated disclosure must be made of participations which are held by several persons that act in concert.
The revision of the circular on market conduct rules became necessary due to the revision of the Federal Act on Stock Exchanges and Securities Trading. The reform seeks to overcome loopholes and deficiencies in the existing regime, thereby strengthening the competitiveness of Switzerland's financial industry. The revised legislation has created specific statutory provisions on stock exchange offences and market abuse.
A new circular issued by the Swiss Financial Markets Supervisory Authority addresses several important aspects of Switzerland's revised collective investment schemes regulation and provides market participants with important new guidance on the interpretation of the new collective investment scheme rules. The circular focuses on the definition of the term 'distribution'.
Parliament recently adopted amendments to the Stock Exchange Act and the Stock Exchange Ordinance, encompassing a comprehensive reform of the regime on stock market offences and market abuse regulation. The reform seeks to strengthen the integrity and competitiveness of Switzerland's financial industry. The revisions also align the Swiss regime with international rules and proposals of the European Commission.
Parliament has recently passed a revised version of the Collective Investment Schemes Act. The new act contains the principal rules and the details are regulated by the new Collective Investment Schemes Ordinance. The revision process of the Swiss collective investment schemes regime has been welcomed by domestic financial market participants.