Introduction

From January 1, 2020, FinSA (together with FinSO) implemented a new prospectus regime for Swiss capital markets, including specific statutory requirements, applicable to all financial instruments (subject to exemptions and customizations for certain financial instruments), under which

(i) any individual in Switzerland who makes a public offer to purchase securities or

(ii) any person seeking the admission of securities to trading on a Swiss trading venue must first publish a prospectus (article 35(1) FinSA).

Perhaps most significantly, and in contrast to the previous system, any such prospectus has to be submitted to a Reviewing Body for approval before publication (i.e., ex-ante prospectus approval) (article 51(1) FinSA). Notably, prospectus approval may be requested for qualifying debt instruments after the prospectus is published (i.e., ex-post prospectus approval).

BX Swiss AG (BX Swiss) and SIX Exchange Regulation AG (SIX Exchange Regulation) stated on May 28, 2020, that they had received clearance from FINMA to function as Reviewing Bodies under FinSA beginning on June 1, 2020. As a result, the prospectus review offices at SIX Exchange Regulation and BX Swiss accept prospectus review and/or deposit applications by FinSA.

According to FinSO, when a public offer or a request for admission to trade on a trading venue is submitted, the need to publish a FinSA approved prospectus will only take effect on December 1, 2020 (i.e., six months after the Reviewing Bodies were licensed by FINMA, article 108(1) FinSO). Therefore, until December 1, 2020, issuers may continue to comply with the former system, in which a so-called offering and listing prospectus may be prepared in line with the Swiss Code of Obligations (CO) and/or the listing requirements of the relevant exchange (where applicable) (article 109(2) FinSO).

After the six-month transition period expires, the duty to issue a FinSA compliant prospectus will apply to all publicly offered securities in Switzerland as well as to those looking to be admitted to trading.

Following their designation as Reviewing Bodies, SIX Exchange Regulation and BX Swiss have now issued the respective rules, lists, directives, and fee schedules of their prospectus offices as anticipated by FinSA and FinSO.

Importantly, if FINMA gives a license to more than one Reviewing Body, it must guarantee adequate coordination of their activity, under article 72(5) FinSO. The prospectus review offices of BX Swiss and SIX Exchange Regulation have collaborated on a number of directives and lists.

Under the new prospectus framework imposed by FinSA and FinSO, the prospectus approval procedure and entry to trade on a Swiss trading venue are often two concurrent processes:

– FinSA prospectus approval (i.e., by a Reviewing Body such as SIX Exchange Regulation or BX Swiss, subject to exclusions and adaptations); and

– Application for trading access on the applicable trading venue (i.e., by the exchange admission body, such as SIX Exchange Regulation).

Following the implementation of the new prospectus system, the Swiss stock exchanges revised their listing regulations to allow these two procedures to run concurrently. However, and probably most importantly, parties are not required to submit a prospectus for approval to the prospectus office of the trading venue on which they are also seeking admission to trade. For example, the BX Swiss prospectus office might approve a FinSA compliant prospectus for an issuer who is also seeking admission to trade on the SIX Swiss Exchange (through the SIX Exchange Regulation application procedure) and vice versa.

This might result in some rivalry in the Swiss market between the two licensed Reviewing Bodies in terms of, among other things, speed, efficiency, and accessibility. Nonetheless, FINMA must guarantee that their processes remain coordinated (see FinSO article 72(5)).