As of: 29th June 2024
Current Issues and Topics
In our bi-monthly update, we provide a detailed overview of the business relevant to our association. This includes the content of the transactions, the status and outlook of the political process and our positions. The update is also available as a PDF via the button at the bottom of the page.
Use the buttons to go directly to the respective department:
Law Department
Draft Register of Beneficial Owners
↺ Updated documents are available here.
The draft for a Federal Law on the Transparency of Legal Entities seeks to enhance the integrity of Switzerland as a financial and business hub. The proposed measures include the establishment of a Federal Register of Beneficial Owners and other specific interventions to enhance the effectiveness of combating money laundering and white-collar crime. These measures are designed to align with the international standards set forth by the Financial Action Task Force and the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Contents
The proposed legislation has two primary objectives. Firstly, it aims to enhance the transparency of legal entities to facilitate more efficient identification of Beneficial Owners by the authorities. This involves the introduction of a Federal Register of Beneficial Owners and the imposition of Anti-Money Laundering Act obligations, including corresponding due diligence requirements, on specific activities within advisory business. Secondly, the bill encompasses amendments to existing laws that aim to bolster the effectiveness of the Anti-Money Laundering efforts. This includes the revision of supervisory regulations and the implementation of additional measures in specific sectors such as real estate and precious metals trading.
Stance
On May 22, 2024, the Federal Council adopted the dispatch on strengthening the fight against money laundering (see press release). According to the press release, the bill aims in particular to introduce a central register for the Identification of Beneficial Owners and due diligence obligations for particularly high-risk activities in the legal professions.
Outlook
The Legal Affairs Committee of the Council of States (RK-S) is expected to discuss the matter at the end of August.
Position
SwissHoldings is generally in favour of approving the transaction. We see a significant need for adjustment in the following points:
- Full exemptions for Listed Companies and their Subsidiaries: The Association is committed to ensuring that listed companies and their subsidiaries receive full exemptions in relation to specific regulations. These companies already have effective reporting and disclosure obligations for Shareholders and Beneficial Owners, which begin to apply when a threshold of 3 percent of the share capital or voting rights is reached. In addition, the accounting standards and reporting obligations of the SIX Swiss Exchange applicable to listed companies stipulate a disclosure obligation for subsidiaries, which already leads to increased transparency.
- Limitation of Access to BO Information: SwissHoldings demands that access to information on Beneficial Owners be reserved for the relevant authorities whose activities serve to combat money laundering and terrorist financing, and that the register, therefore, not be publicly accessible.
- Negligent Breach of the Duty to Report and Provide Information: A negligent breach of the duty to report and provide information must not be subject to the criminal provisions set out in Art. 41 of the AMLA. In our view, it is also crucial that negligence in the event of a breach of the reporting obligation in Art. 37 AMLA is not subject to criminal prosecution. The submitted dispatch dispenses with the sanctioning of negligent violations.
Revision of the Financial Market Infrastructure Act (FMIA)
↺ Updated documents are available here.
As per a report from the Federal Department of Finance (FDF), the Financial Market Infrastructure Act (FMIA) has, by and large, demonstrated its efficacy thus far. The Federal Council is presently undertaking a routine and comprehensive assessment, with a specific focus on enhancing transparency and legal certainty in designated regulatory domains. The consultation on this was opened on June 19 and will last until October 11, 2024.
Contents
The Financial Market Infrastructure Act (FMIA) regulates the licensing and obligations of financial infrastructures, as well as the conduct obligations of financial market participants in securities and derivatives trading. Even before it came into effect in January 2016, the Federal Council announced that the Federal Department of Finance (FDF) would subject the FMIA to a general review and compile a report.
Stance
In this report, the FDF concludes that the FMIA has largely proved its worth since coming into effect. However, it is necessary to further strengthen transparency and legal certainty in specific regulatory areas. Additionally, the Federal Council has determined to enact the reporting obligation for small non-financial counterparties concerning derivatives transactions, which will be made effective on January 1, 2028.
Outlook
The Federal Council’s explanatory report was published on June 19 and the consultation process will run until October 11, 2024.
Position
The proposed amendments to derivatives regulation represent a principled improvement and are, therefore, commendable. However, we emphatically oppose the notion of transferring ad hoc notifications of shareholdings from self-regulation to state regulation under the supervision of FINMA. Self-regulation has demonstrated its efficacy, and its abandonment should only occur when deemed absolutely necessary; it should be preserved as a locational advantage. SwissHoldings will position itself accordingly in the consultation process.
Amendment of the Cartel Act: Partial Revision
↺ Updated documents are available here.
On May 24, 2023, the Federal Council adopted the dispatch concerning the partial revision of the Cartel Act (23.047). The primary objective of this partial revision is to modernize Swiss Merger Control, aligning it with international standards. Additionally, the revision seeks to enhance Civil Antitrust Law and streamline the objection procedure for practicality. In connection with these goals, the Federal Council has directed the Federal Department of Economic Affairs, Education, and Research (EAER) to present a proposal for Institutional Reform in the first quarter of 2024. The Council of States completed its deliberations on the partial revision of the Cartel Act in the second quarter of 2024. The National Council’s Economic Affairs and Taxation Committee is expected to discuss the partial revision at the beginning of October 2024. SwissHoldings expressly appreciates the fact that the long-requested Institutional Reform is now part of the revision.
Contents
The transition from the Qualified Market Dominance Test to the Significant Impediment to Effective Competition Test (SIEC test) is undertaken with the objective of aligning the practices of the Competition Commission (COMCO) with international standards. According to the report by the State Secretariat for Economic Affairs (SECO), the proposed amendments are designed to empower the imposition of targeted prohibitions or the approval of mergers in cases where a significant impairment of competition is identified. The proposition encompasses a streamlined notification obligation for mergers at the European level and a regulation pertaining to the extension of deadlines within the examination procedure. Another integral aspect of the legislative amendment involves the reinforcement of Civil Antitrust Law, with an anticipated extension for the right to institute legal proceedings. Furthermore, the objection procedure is slated for enhancement to render it more practicable by avoiding the immediate risk of sanctions in the event that an investigation is not initiated within the stipulated shortened deadline.
Stance
As part of the preparation of the dispatch on the partial revision of the Cartel Act (Cartel Act), the Federal Council integrated two demands from Motion 16.4094 Fournier to improve small and medium-sized enterprises (SMEs) in competition proceedings. These include the introduction of time limits and party compensation for first-instance proceedings before COMCO. Furthermore, the preliminary draft contains a proposal for the implementation of Motion 18.4282 Français, which was adopted in June 2021 and takes qualitative and quantitative criteria into account. Finally, rules on the principle of investigation, the presumption of innocence and the burden of proof are included in order to implement the requirements of Motion 21.4189 Wicki. Further information can be found in the press release and the consultation documents.
Outlook
The WAK-N is expected to continue discussions at the beginning of October.
Position
In particular, SwissHoldings expects the Français and Wicki Motions to be strictly implemented. Both Motions demand that authorities and courts must (once again) deal with the actual effects of an agreement or conduct and demonstrate its harmfulness to competition. The WAK-S proposal meets these expectations and also introduces the required compliance defense (see the SwissHoldings position paper to the WAK-S). On the other hand, the Council of States rejects the idea that the competition authority should have to deal with the actual impact of an agreement or practice.
Amendment of the Cartel Act: Institutional reform
As part of the revision of the Cartel Act, the reform of the competition authorities will be addressed in a separate procedure, as requested by various parties during the consultation process. This approach should ensure that the revision of the Cartel Act does not once again fail due to obstacles. The EAER, which was entrusted with this task by the Federal Council, prepared more concrete implementation proposals for the reform on March 15, 2024. Based on the final report of the commission of experts, the Federal Council has instructed the EAER to submit a consultation draft by mid-2025.
Contents
Concurrently with the ongoing partial revision of the Cartel Act, the Federal Council is advancing a distinct overhaul revision of the competition authorities (hereinafter referred to as Institutional Reform). This aspect is no longer integrated into the suggested Cartel Act revision but is being addressed as a separate initiative. This approach draws on insights derived from the unsuccessful 2012 revision of the Cartel Act, which faced rejection twice in the National Council. The Institutional Reform primarily targets rectifying issues within administrative proceedings, particularly concerning the separation of decision-making and investigative functions. In 2012, the Federal Council advocated for the establishment of a Competition Authorities Act (CAA) in its dispatch on the Cartel Act revision. This proposal entails a restructuring of the prosecution process: a competition authority would conduct investigations and subsequently file an application with a first-instance competition court. This constitutes the central tenet of the proposed Institutional Reform.
Stance
An independent commission of experts was set up to examine the implementation proposals. The recently published final report of the commission of experts, chaired by former Federal Judge Hansjörg Seiler, concluded that COMCO basically functions well and has no constitutional deficiencies. A change of system is therefore not warranted.
Outlook
On March 15 2024, the Federal Council instructed the EAER to submit a consultation draft on the reform by mid-2025 based on the final report. The separation is now to be made more effective by having the Secretariat conduct investigations consistently without the involvement of COMCO, with COMCO remaining a militia authority. Furthermore, it is being examined whether COMCO could be relieved by appointing a person in charge of the proceedings. Finally, the Federal Council would also like to strengthen the appeals procedure of the Federal Administrative Court by appointing part-time specialist judges. The Federal Council is thus following the recommendations of the Expert Commission overall.
Position
SwissHoldings welcomes the fact that the much-demanded Institutional Reform has now been taken up in parallel with the ongoing revision of the Cartel Act. The intended changes show a clear commitment to modernizing and strengthening the existing institutional structures in the area of Antitrust Law. However, it will be necessary to examine whether the proposed changes, particularly the change of system, are expedient. SwissHoldings will position itself accordingly during the consultation process and is in favor of a separation between the investigative and decision-making authorities.
Taxation Department
OECD/G20 Project on the Taxation of the Digitalized Economy
↺ Updated documents are available here.
The OECD project still faces an uncertain future. Technical differences of opinion on Pillar 1 should soon be resolved and Pillar 2 is already being implemented by most European countries, but not by major economies such as the USA, China, Brazil or India. The minimum tax is therefore currently more of a European project. China is rumoured to be considering the introduction of a supplementary tax and the election of Donald Trump could increase resistance in the USA and influence other countries. Switzerland must constantly monitor international developments and promote a balanced competitive environment and instruments to promote the attractiveness of Switzerland as a business location.
Contents
The OECD project on the taxation of the digitalised economy is based on two pillars and aims to improve the acceptance of international corporate taxation. The new tax rules are formally adopted by the OECD/G20 Inclusive Framework on BEPS (hereinafter: IF), which comprises more than 140 countries. In October 2021, the IF states adopted the political parameters for the two pillars. Since then, intensive work has been carried out on the technical implementation provisions. For Pillar 1, a multilateral agreement is to be submitted to the states for signature and subsequent ratification in 2024. Pillar 2 will not be implemented by means of a multilateral agreement, but by means of a standardised implementation of the rules developed jointly but adopted individually by the states (common approach).
Stance
The project initiated by the G20 to tax the digitalised economy still faces an uncertain future. Even among the G20 member states, the initial euphoria has faded. The last technical differences of opinion on Pillar 1 are to be resolved so that the multilateral convention can be signed and later ratified. The signing process should have started at the end of June 2024, but there is still no date in mid-July. There are doubts as to whether the rules will ever come into force, as the USA is unlikely to ratify the agreement. Without the USA, the redistribution of the tax base cannot start. Things are looking better for the OECD minimum taxation (Pillar 2): Almost all European countries have started implementation at the beginning of 2024. However, the USA, China, Brazil and India are showing no signs of introducing it. If Donald Trump is elected, resistance from the USA could increase. Switzerland and its companies should therefore prepare for a highly fragmented and uncertain international tax landscape in the coming years.
Outlook
The future of OECD minimum taxation is uncertain, as global enforcement by major economic powers such as the USA, China, India and Brazil is uncertain. Many countries want to promote industrial companies and attract additional investment instead of creating tax obstacles. The earlier euphoria has faded, and the outcome of the US elections will play a decisive role. Switzerland cannot significantly influence the rules but should prevent protectionist advantages for other countries. Swiss companies are therefore faced with complex application and location issues.
Position
SwissHoldings has taken note of the Federal Council’s decision in December 2023 to introduce the Swiss supplementary tax at the beginning of 2024. While the introduction of the IIR from 2025 is supported by the business community, SwissHoldings is strictly opposed to the introduction of the UTPR. We fear that taxation by Switzerland will not be accepted by countries such as the USA and China and could provoke countermeasures. Before the UTPR is introduced, its international acceptance should be monitored for several years, as there are considerable reputational and location risks. In particular, the risk of trade wars with major trading partners must be taken into account. The UTPR is politically and academically controversial and could lead to threats of sanctions and conflicts with double taxation. SwissHoldings recommends reviewing the steps towards minimum taxation with regard to possible collateral damage and emphasises the need for flexibility and compensation for locational disadvantages. The following factors should be taken into account:
- International requirements such as the implementation of the EU Foreign Subsidy Regulation of OECD minimum taxation
- Effects on the attractiveness of various locations industries
- Financial and economic consequences (short, medium and long term) without countermeasures
- Possibility of creating internationally accepted and targeted location measures
- Effects under transfer pricing law
- Domestic political aspects
Economics Department
Bilateral Relations between Switzerland and the EU
Switzerland has a dense network of bilateral agreements with the EU. By updating five existing agreements with two new internal market agreements and based on cooperation in research, education, and health, the Swiss-EU relationship is to be further developed and stabilized. However, the EU has linked this further development of the network of agreements to a clarification of the institutional framework. The package approach is now to be used for this purpose. Instead of regulating institutional issues as a whole in a horizontal agreement, these issues are now to be resolved individually in each agreement on a sector-specific basis. SwissHoldings welcomes the Federal Council’s efforts, based on a new package of agreements with the EU (“Bilaterals III”), to put existing relations on a solid and lasting footing. At the same time, the association believes it is important to work towards an even better understanding of the longer-term effects of the dynamic adoption of legislation on Switzerland as a business location before concluding an agreement with the EU.
Stance
At the end of December 2023, the Federal Council adopted the draft negotiating mandate with the EU for the so-called “Bilaterals III” and submitted it for domestic political consultation. At the heart of this mandate is a package approach. Instead of regulating institutional issues as a whole in a horizontal agreement, these issues are now to be resolved individually in each agreement on a sector-specific basis. SwissHoldings participated in the consultation process with its own submission. On Friday, March 8, 2024, the Federal Council formally adopted the final mandate for the EU negotiations.
Position
SwissHoldings welcomes the Federal Council’s efforts to continue to place existing relations on a solid and lasting footing based on a new package of agreements with the EU (“Bilaterals III”). The bilateral treaty relations between Switzerland and the EU, along with their significant achievements, have proven their worth for both sides. The conclusion of the planned negotiation package should have a direct positive impact on SwissHoldings member companies in various ways. The existing market access agreements can be consolidated, and further developed, and new market access agreements can be concluded. The dynamic adoption of evolving EU law, in combination with the introduction of an institutionally anchored dispute resolution mechanism, creates reliable and predictable framework conditions for Swiss companies but may also entail further integration steps for Switzerland. However, there is a lack of reliable scenario analysis to assess how the newly planned institutional elements will affect the future shape of Swiss economic policy in general, also in the context of expected developments at a higher political level. SwissHoldings would welcome it if the Federal Council could present a corresponding report at the start of the negotiations to conduct the negotiations with a view to the longer-term effects on Switzerland’s competitiveness as a business location. The assessment of the benefits of the treaty package must also take into account the necessary domestic political concessions.
Free Trade Agreement
↺ Updated documents are available here.
The Swiss economy has a strong international focus and engages in extensive cross-border trade and investment activities. Therefore, improving access to foreign markets, especially through free trade agreements, is a central focus of Swiss foreign policy.
Contents
In addition to regulated trade relations, the strongly export-oriented Swiss economy also relies on a broad network of Free Trade Agreements (FTAs). Switzerland has succeeded in continuously expanding this network in recent years. The latest breakthrough after 16 years in the negotiations for an FTA with India is particularly pleasing. The signing of the agreement on March 10, 2024 in Delhi between the EFTA states (Switzerland, Iceland, Liechtenstein and Norway) and India is a significant milestone in Swiss trade policy. China and Switzerland recently agreed to start talks on expanding their free trade agreement. Economics Minister Guy Parmelin emphasized the importance of free trade, while Switzerland exported goods worth CHF 40.6 billion to China in 2023.
Stance
The Swiss economy has a strong international focus and maintains extensive cross-border trade and investment activities. A central focus of Swiss foreign policy is to improve access to foreign markets through Free Trade Agreements. In addition to the EFTA Convention and the Agreement with the EU, Switzerland has 33 Free Trade Agreements with 43 partners worldwide. Switzerland is currently negotiating with six new partners, including Kosovo, Malaysia, Mercosur, Thailand, and Vietnam, and is modernizing existing agreements, such as those with Chile, Mexico, and the South African Customs Union. China and Switzerland have also agreed to expand their Free Trade Agreement.
Position
Particularly against the backdrop of growing trade conflicts worldwide, the declining influence of the World Trade Organization (WTO), and growing protectionism in general, the expansion of the network of Free Trade Agreements is extremely important for the export-oriented Swiss economy and, thus, also for the member companies of SwissHoldings.
Investment Controls
↺ Updated documents are available here.
The introduction of an investment review is intended to prevent takeovers of domestic companies by foreign investors if they endanger public safety. The WAK-N adopted the draft by 18 votes to 6 and made adjustments to sector-specific thresholds.
Contents
The introduction of an investment review is intended to prevent takeovers of domestic companies by foreign investors if these takeovers endanger or threaten public order or security in Switzerland. To this end, takeovers of domestic companies operating in a particularly critical area by foreign state-controlled investors will be subject to an approval requirement. These areas include military equipment and goods for civilian and military use, electricity grids and production, water supply facilities and healthcare, telecommunications and transportation infrastructure. Small companies are generally exempt from the provisions. The WAK-N adopted the draft by 18 votes to 6 and made adjustments to sector-specific thresholds in order to increase legal certainty.
Stance
At its meeting on May 18, 2022, the Federal Council published the preliminary draft for a new Investment Control Act and subsequently submitted it for consultation. Parliament had previously called for a corresponding legal basis by adopting Motion 18.3021 Rieder. The proposal is to introduce a notification and approval requirement for certain takeovers of domestic companies. At its meeting on December 15, 2023, the Federal Council adopted the dispatch on the matter for the attention of Parliament. The draft bill was discussed by the WAK-N and adopted in the overall vote on June 24/25, 2024, which was then published on July 8, 2024.
Position
Foreign direct investment is of central importance for Switzerland, as it significantly promotes prosperity and competitiveness in our small and open economy. SwissHoldings advocates for a lean law that minimizes the burden on investors, while enabling the necessary controls to ensure integration into global markets. As part of the consultation process, the Federal Council presented a regulatory impact assessment on the preliminary draft, which reveals an unfavorable cost-benefit ratio for a new law. The question of whether Switzerland should introduce an investment review cannot be assessed in isolation from international developments. If restrictions on certain foreign investments are introduced across the board by OECD member states, this must be taken into account when assessing the Swiss regulatory approach, not least to prevent a pull effect on the Swiss economy.
Investment Protection Agreements
SwissHoldings closely follows the developments surrounding the investment agreements and emphasises the great importance of these agreements for Switzerland as a business location. With over 111 Bilateral Investment Protection Agreements (BITs), Switzerland boasts the third-largest network of such agreements globally. These agreements serve as a crucial pillar in enhancing Switzerland’s appeal as a business location. Currently, an agreement is being formulated with Indonesia, and SwissHoldings is actively monitoring the developments surrounding these investment agreements, emphasizing their significant importance for Switzerland as a business destination.
Contents
Switzerland maintains a network of 111 Bilateral Investment Protection Agreements (BITs), positioning it as the third-largest global network after Germany and China, according to UNCTAD. By entering into Investment Protection Agreements (IPAs), Switzerland enhances the regulatory framework, thereby augmenting its attractiveness as an international investment destination.
Stance
With a change in practice by the Federal Council, Investment Protection Agreements (IPAs) are now subject to an optional state treaty referendum, in addition to free trade agreements. The first IPA undergoing consultation is the new agreement with Indonesia, addressing the contractual gap that emerged since the expiration of the previous agreement in 2016.
Position
Direct investments are key for Switzerland: the prosperity of the population and the competitiveness of companies in the small and open Swiss economy depend directly on their integration into global value chains. Investment promotion and protection agreements play an essential role here: foreign investments not only entail economic risks for companies, but also political risks. This makes treaties between states to protect and promote foreign investment activity even more important.
Effective investment protection requires an investor-state arbitration mechanism: investor-state dispute settlement procedures have proven their worth both for Switzerland and for Swiss companies. They build on existing international structures (ICSID, UNCITRAL) and enable disputes to be resolved in a relatively timely, objective and politically independent manner.
Corporate Responsibility
↺ Updated documents are available here.
The rejection of the Responsible Business Initiative occurred via ballot on November 29, 2020, consequently ushering in the enforcement of the indirect counter-proposal. Swiss entities will commence reporting under the new regulations for the first time in 2024, covering the 2023 financial year. Furthermore, the Federal Council has disclosed its intention to explore adjustments to the legislation that align with the European Union’s updated regulatory strategies concerning sustainability reporting and due diligence.
Contents
Developments worldwide (e.g., within the OECD), particularly in the EU, have progressed in recent years both in the areas of non-financial reporting and—after fierce political wrangling—in the area of due diligence obligations. The EU has adopted numerous regulations as part of its Green Deal, also with the aim of establishing itself as a global standard setter. There is a close connection between the OECD’s new MNE Guidelines and the EU Supply Chain Regulation (CSDDD). The OECD had already drawn up far-reaching recommendations before the EU, which the EU is now implementing in a legally binding manner and with bureaucratic additions, including a supervisory authority at the EU member state level. This race for leadership in regulatory standard setting is also reflected in the strong extraterritorial focus of EU regulations: Swiss companies are directly and indirectly affected by the rules.
Stance
At the end of June, the Federal Council opened the consultation on the expansion of sustainability reporting rules in Switzerland (see also Link to the press release and the documents). The consultation will last until October 17, 2024. As part of the preparation of the preliminary draft, the Federal Administration examined several options for this expansion of the rules: 1. “Full implementation” of the new EU Corporate Sustainability Reporting Directive (CSRD), 2. “Partial implementation” of the CSRD and 3. maintaining the “status quo” – whereby the committee opted for the option of “partial implementation” of the EU directive and proposed this accordingly in the preliminary draft. At the same time, the Federal Council also published an update on its strategy regarding the new EU due diligence directive (CSDDD). It emphasized that it would like to have the impact on Swiss companies assessed by an external study by autumn 2024 and then determine the next steps.
Position
Many Swiss companies have recently made considerable efforts to implement the new due diligence and reporting obligations set out in the counter-proposal to the Responsible Business Initiative. The first reports will be published by these companies this year. The business community would like to see the Federal Government coordinate closely across departments with regard to the upcoming further work in this area and, in particular, not overburden companies. The review of an adjustment as a result of new regulatory projects at the EU level should always be carried out based on established practice, including a careful assessment of the cost consequences for companies. Last but not least, it should also be borne in mind that developments in the area of ESG regulation are very dynamic outside the EU as well. The Swiss economy has a broad global base, with just over 50 percent of its exports currently going to countries outside the European Union. To avoid duplication, close coordination with the globally applicable ESG standards is also required, although neither Switzerland nor other jurisdictions outside the EU are familiar with the centralist, or to some extent even planned economy, approach pursued by the EU Green Deal. Furthermore, there are even opposing trends in some cases. For example, the U.S. Securities and Exchange Commission (SEC) recently delayed a further expansion of the climate reporting rules for listed companies. To avoid duplication, it is crucial that coordination is not carried out exclusively with the new EU rules but rather with the globally applicable approaches and standards. In addition, it remains to be seen what impact the new strategic priorities agreed at the EU level will have on the implementation of the new directive in the member states and whether the EU will even partially recalibrate the EU Green Deal.
Collective Legal Protection
Switzerland is presently undergoing political deliberations on the potential expansion of its existing array of collective redress instruments. In December 2021, the Federal Council issued the corresponding dispatch for parliamentary consideration. However, from the business community’s perspective, the bill is not ripe for parliamentary discussion. The Federal Council’s proposal is criticized for approaching dispute resolution from a limited perspective, exclusively focusing on a specific Procedural Law instrument. It fails to consider international developments in recent years, new technological possibilities, and potential alternatives to court-based class actions.
Contents
As per the Federal Council’s dispatch, the Class Action Bill entails the expansion of the existing class action, the establishment of a new class action for asserting compensation claims, and the introduction of a new mechanism for court-declared binding settlements.
Stance
The introduction of class actions has been under discussion in Switzerland for over ten years. The National Council’s Legal Affairs Committee has been discussing the introduction of extended class actions and group settlements for two years. In April, the committee once again decided not to act on the bill. Instead, it has tasked the administration with clarifying how the bill should be viewed in light of the ECtHR ruling in favor of the Swiss “climate senior citizens” (see also press release from the Committee on Legal Affairs). The bill will therefore not be discussed by the National Council until the fall session at the earliest.
Position
The business community clearly rejects the Federal Council’s proposal for the introduction of extended representative actions and class settlements. This was also evident from the recently published survey conducted by the Sotomo Research Center under the direction of renowned political geographer Michael Hermann. It is unnecessary and dangerous. A look abroad confirms this. There is no reason to follow such undesirable developments in Switzerland. The proposal should therefore no longer be pursued. Efficient dispute resolution instruments exist for the efficient settlement of collective claims outside of civil proceedings and therefore outside of courtrooms. Especially in the wake of current technological developments, solutions are possible here, which are significantly superior to the Federal Council’s ten-year-old proposal. Switzerland would do well to focus on the right technology instead of introducing outdated and obsolete instruments into our legal system.
IFRS Standardization
SwissHoldings diligently monitors developments in the realm of IFRS standardization. For its globally engaged members, the presence of a universally recognized reporting standard holds pivotal significance as the foundation for their own reporting. Following the convergence process with the US standard US GAAP, the evolution of standards has somewhat stabilized. Additionally, the IFRS Foundation’s newfound focus on ESG reporting is progressively assuming a more prominent role in the organization’s undertakings.
Contents
The IFRS Foundation functions as a non-profit foundation, aiming to formulate high-quality global accounting standards, promote the utilization and implementation of these standards, and facilitate the alignment of national accounting standards with its global counterparts. The Foundation supervises the activities of both the IASB (International Accounting Standards Board), responsible for financial standards, and the ISSB (International Sustainability Standards Board), responsible for non-financial standards.
Stance
In the recent period, the IASB concluded two projects: “Business Combinations under Common Control” and “Extractive Industries.” Additionally, work on the IAS 32 project (Classification as Equity or Liabilities) continued. Simultaneously, the ISSB, the collaborating standard-setting partner, is making progress in the realm of sustainability reporting. In recent weeks, the ISSB released the initial two standards (S 1 and S 2). S 1 pertains to the overarching level, delineating principles for presenting sustainability-related opportunities and risks in a comprehensive manner. On the other hand, S 2 specifically addresses climate-related reporting. SwissHoldings remains actively engaged in monitoring the activities of the IFRS Foundation and contributing to pertinent consultations on behalf of its members.
Position
The detailed positions are shown in the association’s statements (mostly in German).
Initial Situation of Switzerland as a Financial Center
↺ Updated documents are available here.
The merger between Credit Suisse and UBS, which was agreed upon in March last year, has changed the competitive situation in the Swiss financial center. The merger of the two largest players in the market was likely acceptable in view of the crisis situation. Conversely, it would not be in the interests of Swiss companies or the economy as a whole if this concentration now led to market distortions or to a poorer or more expensive range of financial services, where competition may no longer play a role.
Contents
FINMA had already informed the Competition Commission (COMCO) prior to the publication of the merger of the two banks that it would claim responsibility for the Competition Law assessment, as provided for by law. However, it subsequently invited COMCO to issue a statement in which it evaluated the impact of the merger on the effectiveness of competition based on market clarifications and statements from competitors, associations, and specific clients.
Stance
FINMA communicated in mid-June 2024 that it had concluded the antitrust control proceedings on the merger between UBS and Credit Suisse without any conditions, requirements or further reviews. (Link to the statement) In its review proceedings, the authority came to the conclusion that the merger between UBS and Credit Suisse would not eliminate effective competition in any market segment, even if UBS was able to strengthen its market position in certain sub-segments. The legal requirements for merger control are therefore not met.
Position
Our association has dealt intensively with the effects of the merger between Credit Suisse and UBS on the Swiss financial market. The office sought an early exchange with members in order to understand how they view the new competitive situation in the Swiss financial center and whether they suspect future gaps in certain services or business areas. This was done in parallel with the COMCO proceedings, which in turn identified various challenges. Nevertheless, it should be noted that developments are dynamic: The integration of the two big banks is still in its infancy – until recently, the two banks (UBS and Credit Suisse) have largely appeared on the market as two different banks. In addition, it is currently unclear to what extent foreign banks can and want to establish themselves on the Swiss market.
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SwissHoldings Update June 2024
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SwissHoldings Update April 2024
