On June 15 2018, the Swiss Parliament adopted the Swiss
Financial Services Act (FinSA). In the meanwhile, the Swiss
Federal Council opened a consultation process regarding the
Financial Services Ordinance (FinSO), implementing the
provisions of the FinSA, which will last until February 6 2019.
Together with the new Swiss Financial Institutions Act, the
FinSA and the related implementing ordinances are expected to
enter into force on January 1 2020. These laws are part of an
entirely new regulatory framework governing the Swiss financial
The new prospectus rules entail a radical change for
securities offerings in Switzerland. This article provides an
overview of those new prospectus requirements which are
generally relevant for corporate issuers.
New duty to prepare and obtain approval of
Until now, Swiss prospectus requirements were incomplete and
partially outdated. Except for issuers listed at Swiss stock
exchanges, there was no obligation to file or obtain the
approval for a prospectus under Swiss law. In contrast, the
FinSA takes on the model of the EU Prospectus Regulation and
introduces a regulatory obligation to prepare a prospectus in
connection with any public offering of securities or the
admission of securities to trading on a Swiss trading venue.
The term 'public offering' should be construed broadly. The
obligation will apply indistinctly to primary and secondary
offerings and any offer to an undetermined circle of persons
will be deemed to be a public offering. In contrast, offerings
outside of Switzerland will not be subject to this obligation,
even if they relate to securities issued by Swiss issuers.
The obligation to prepare a prospectus will be subject to
various exemptions modelled to a large extent on the EU
Prospectus Regulation, including public offers:
– to professional investors;
– to fewer than 500 investors;
– to investors who acquire securities for a
consideration in excess of CHF 100,000 ($100,100
– for securities with a denomination of more than
CHF 100,000; or
– raising less than CHF 8 million in total over a
period of 12 months.
Similarly, various types of transactions with securities
will be exempt from the obligation to issue a prospectus,
including offerings made in connection with employee
participation plans and various corporate transactions.
Furthermore, the FinSA provides for exemptions relating to the
admission of trading for securities that are already admitted
to trading on a Swiss or recognised foreign trading venue,
including securities of the same type as already admitted
securities of less than 20% during 12 months.
Similar to EU law and the rules of the SIX Swiss Exchange,
but marking a departure from the outdated rules of the Swiss
Code of Obligations, the prospectus must broadly include
material information in respect of the issuer, the offered
securities and the offering, as well as a summary.
The FinSA provides that the prospectus may be drawn up in an
official Swiss language or in English. It also officially
recognises incorporation by reference to all types of publicly
available documents, including, for example, financial
statements, Swiss and foreign prospectuses and press
Review and approval
The FinSA introduces a new review and approval of
prospectuses before the offering or the admission to trading. A
review board (Prüfstelle) will review
prospectuses to ensure that they are complete, coherent and
understandable, leading presumably to a more thorough scrutiny
than is the case now, even for listed securities at the SIX
The review board will not be a governmental body but a
private institution licensed by the Swiss Financial Market
Supervisory Authority (Finma), acting, however, as an
administrative authority under the Administrative Procedure
Act. We expect that at least two review boards will be
licensed, which may lead to competition and lower costs for
Furthermore, to ensure a short time to market, the FinSA
allows certain debt securities to be offered before the
prospectus is approved if a bank or a securities house confirms
that the essential information regarding the issuer and the
securities is available.
To facilitate cross-border securities offerings, the FinSA
authorises the review board to recognise foreign prospectuses
as equivalent. It also provides for a passporting mechanism
that would include automatic recognition of foreign
prospectuses (eligible jurisdictions still need to be
determined by the review board).
Once it is approved, the prospectus needs to be filed with
the review board and published. It is sufficient to publish it
in electronic form and offer it free of charge in print form
upon request. A prospectus is then generally valid for 12
months (subject to certain exemptions).
However, if a new development occurs before the end of the
offering or the admission to trading that would influence an
investment decision, a supplement will need to be prepared,
reviewed and approved. If such a new development occurs before
the end of the offering, investors will have withdrawal rights
until the end of the subscription or offering period.
Prospectus liability rules of the FinSA are based on the
existing Swiss corporate law rules. Notably, the FinSA does not
depart from existing case law and, as a result, does not
introduce the 'fraud on the market' theory in the statute. At
the same time the legislative materials indicate that the
applicable evidential standards should in practice lead to
similar results. Moreover, after a long deliberation in
Parliament, the act does not provide for a specific rule on the
burden of proof and, consequently, the plaintiff will need to
prove that the defendant acted intentionally or negligently.
The FinSA further limits liability for the summary and for
Beyond civil liability, the FinSA also provides for
administrative criminal liability sanctioned by a fine of up to
CHF 500,000 for wilfully making false statements, omitting
material facts or failing to publish a prospectus in a timely
The new regulations will require substantial changes in the
offering of securities in Switzerland. The regulatory burden is
likely to increase. However, the exemptions provided for by the
law and the ordinance ensure to a large extent that this burden
will remain commensurate. In addition, certain outdated
prospectus requirements that often resulted in an unnecessary
burden have been abolished.
While the FinSA has been approved by Parliament, the
implementing ordinances, which are important for the content of
the prospectuses and certain exemptions, are still only
available in draft form and subject to changes. Thus, it is
worth keeping an eye on further developments in 2019. The FinSA
is expected to enter into force together with the ordinances on
January 1 2020, subject to certain transitional rules.