Effective February 1 2005, the SWX Swiss Exchange enacted a revised set of rules for listing bonds, opening up possibilities for listing international bonds. The changes made to the prospectus requirements take into account current practice in the international bond markets and the regulatory changes under way in the EU.

The following is an overview of the factors that argue in favour of listing international bonds on the SWX. Table 1 compares these advantages to the corresponding EU provisions.

• Internationally recognized securities exchange: SWX offers cost-efficient listing on a globally recognized securities exchange and guarantees that issuers have access to an international circle of investors, especially institutional investors.
• Bonds can be listed in various foreign currencies: SWX enables the listing of bonds in all main currencies. As well as Swiss francs, bonds can be listed in euros, US dollars, UK pounds, Australian, Canadian and New Zealand dollars, Danish and Norwegian kroner, Hungarian forints, Japanese yen, Polish zloty, Swedish kronor, Turkish lira and South African rand.
• Bonds can be issued under foreign law yet also listed on SWX: No alternative place of jurisdiction in Switzerland needs to be designated. On SWX, it is possible to list bonds that are subject to the law of any OECD country and have a place of jurisdiction in the country whose laws apply to the bond terms and conditions. The same principle applies to guarantee commitments associated with the bonds.
• Registration and listing on the basis of issuance programmes: The listing regulations also allow the registration of issuance programmes on SWX, for example medium-term note programmes. The registration is valid for one year, and the issuance programme can be updated and renewed each year. Consequently, the listing of individual bond issues can be accomplished merely by publishing a term sheet (pricing supplement) that complies with the listing rules.
• References are permissible in the listing prospectus (incorporation by reference): Making reference in the listing prospectus to audit and annual reports, periodic interim financial reports, as well as domestic and foreign issuance programmes is permitted, provided the relevant documentation is made physically available to interested parties at a central location and at no cost.
• Electronic publication of listing notices: The electronic publication of listing notices is permitted, provided specific systems, processes and formats are used. As a result, printing and publication costs are reduced.
• Recognition of alternative accounting standards for foreign issuers: In addition to IFRS, SWX accepts US GAAP, Swiss GAAP, the accounting standards of the EU and EEA states, as well as those of Australia, Canada, Japan, New Zealand and South Africa. Other generally accepted accounting principles are accepted if the applied standard ensures a true and fair view, and the listing prospectus and annual reports contain a detailed written explanation of the differences between the applied standard and IFRS or US GAAP. If the audited annual or consolidated financial statements already contain a numeric reconciliation of the applied standard versus IFRS or US GAAP, disclosure of this explanation can be waived.
• Smaller denominations possible: SWX recognizes no difference between a wholesale and retail regime. For example, denominations of €1000 also fall under this listing regime.
• Clearing and settlement: The listed international bonds can be cleared and settled through an official clearing organization designated by the SWX such as SIS SegaIntersettle, Clearstream or Euroclear.
• Convertible bonds: Convertible bonds are subject to the disclosure regime for bonds and not to the regime for shares, so semi-annual accounts need not be drawn up.
• Further advantages: In Switzerland, a responsibility statement is only required from the issuer and not from the individuals in charge of general management.

Moreover, SWX makes every effort to offer issuers, listing agents (or banks) a smooth listing procedure.

Self-regulation – pragmatic and cost-efficient

The SWX Swiss Exchange performs important regulatory duties in Switzerland. Within the context of self-regulation provided for in the Stock Exchange Act, it sets the requirements for listing on the exchange. The country's lawmakers have conferred the power of self-regulation on SWX, subject to approval and supervision by the Swiss Federal Banking Commission (SFBC). The SWX Admission Board enacts the regulations (rules, directives and circulars) governing the listing of securities and the maintenance of listings. It also carries out various supervisory duties, which are performed by official regulatory agencies in other countries. SWX has a vested interest in high regulatory standards, given the crucial need to maintain market confidence and ensure the competitiveness of the Swiss financial marketplace.

The advantages of self-regulation include the speed with which SWX can respond to new needs and the ability to bring together recognized and experienced practitioners in the rule-setting bodies. Finely honed professional skills, long-standing experience, closeness to the market and familiarity with the needs of investors, issuers and exchange participants alike, make it possible to find pragmatic, balanced, cost-efficient solutions that are consistent with internationally recognized standards.

A wide array of bonds

SWX has established a solid position as an attractive and renowned platform for international bonds. Its modernized rules and regulations ensure legal certainty, equal treatment and transparency for the investing public as well as for issuers. The latest numbers speak for themselves: in addition to 725 non-Swiss and 576 Swiss bond issues, 51 so-called exchange traded funds (ETFs), shares of 413 companies, more than 8633 derivative financial instruments, and a further 2819 international bonds have also been admitted to trading on SWX.

Since the February 2005 Additional Rules for the Listing of Bonds, 30 new Eurobond issues (see table 2) have been listed on SWX and five issuance programmes registered there (see table 3). The palette encompasses US dollar-, euro- and UK pound-denominated bonds of top-rated borrowers, as well as high-yield bonds, global bonds and loan participation notes. Borrowers from Australia, Brazil, France, Germany, Japan, Switzerland and Ukraine have already taken advantage of the favourable listing conditions in Switzerland. The Landwirtschaftliche Rentenbank, a prestigious and frequent issuer in the capital market, has chosen SWX as the listing venue for a number of its global bond issues.

EU Transparency Directive

Because Switzerland is not an EU member state, the EU's Transparency Directive (Directive 2004/109/EC) scheduled for introduction on January 20 2007 will not apply in Switzerland. This means that issuers whose bonds are listed on SWX need only comply with the previous maintenance requirements. The basic differences between the EU's planned maintenance requirements and those of SWX are shown in table 4.

SWX Swiss Exchange

The SWX Swiss Exchange is a central link in the value chain of the Swiss financial marketplace. It organizes, operates and networks the main elements of Switzerland's capital market infrastructure. As a not-for-profit, jointly owned association, it upholds the best interests of the Swiss financial centre as a whole and ensures a balance between the interests of all market participants.

Its areas of business activity encompass admission, the SFBC-supervised cash market, information products, as well as the development and operation of trading platforms. Apart from bonds (Swiss-franc bonds and international bonds), the SWX also facilitates the listing and trading of shares, traditional investment funds, index-linked funds (ETFs), as well as non-standardized derivatives. Measured on the basis of total turnover, SWX operates Europe's second-largest market segment for listed and exchange-traded securitized derivatives.

Table 6: Participants (as at end of July 2006)

Table 7: Securities (as at end of July 2006)

Jacqueline Morard SWX Swiss Exchange Jacqueline Morard is deputy head of the Admission Division of the SWX Swiss Exchange. Morard joined SWX in 1998 as deputy head of the Admission Division and head of the Listing Department. Since 2004 her main responsibility has been regulatory strategic projects. Before joining SWX Morard had been, since 1993, a senior vice-president at UBS and head of the documentation and legal/compliance team of the UBS Investment Banking Department in Switzerland. In this function she advised on and documented capital market transactions (equity, debt and derivative instruments). She also was giving legal advice regarding merger and acquisitions transactions. Before this position within UBS, Morard had been an account manager in the UBS project finance team in Zurich where she was covering the French, Italian and Spanish markets. Before joining this team she had spent eight years at UBS legal department where she specialized in international transactions. Morard studied law at the University of Lausanne (Switzerland) and is qualified as an attorney-at-law (admitted to the Geneva Bar). She also worked for over two years in New York (Shearman & Sterling and UBS). During her time at UBS Morard was member of various commissions and working groups for banking matters. Since 2000 she has been a member of the Disclosure Subcommittee of the International Organization of Securities Commissions.