The purpose of this newsflash is to inform market participants that FINMA has authorized the two Swiss prospectus review bodies. The authorization of these review bodies also triggers and more clearly defines applicable transitional periods with respect to the obligation to have securities prospectuses reviewed and approved prior to making a public offering or requesting the admission to trading of securities in Switzerland.
On January 1, 2020, the Swiss Financial Services Act (FinSA) entered into force. Among other things, the FinSA also introduced a new prospectus regime. Under such new regime, issuers of securities generally have to prepare and publish a prospectus (subject to a wide range of exemptions) whenever they are making a public offering of securities or requesting the admission to trading of securities on a Swiss trading venue. Such prospectus has to be reviewed (with respect to completeness, coherence and clarity) and approved by one of the Swiss review bodies, with such review and approval generally having to occur prior to the public offering or request for admission to trading of securities.
Unlike in other jurisdictions, under the FinSA the prospectus review and approval process is not conducted by a governmental authority. Rather, private organizations can request from FINMA an authorization for acting as prospectus review body. Today, FINMA announced that it has approved the applications of SIX Exchange Regulation Ltd. and BX Swiss AG as review bodies with effect as of June 1, 2020.
Transitional periods for prospectus review
Pursuant to art. 109 of the Swiss Financial Services Ordinance (FinSO), the obligation to publish a reviewed and approved prospectus will come into effect six months following the authorization of the first review body. With the authorization of SIX Exchange Regulation Ltd. and BX Swiss AG as review bodies, the transitional period will thus expire by the end of November 2020. Starting from December 1, 2020, issuers of securities have to submit their prospectus for review to one of the review bodies whenever they either publicly offer securities in Switzerland or when they are requesting admission to trading on a Swiss trading venue.
During the transitional period, issuers that have to prepare and publish a prospectus can prepare such prospectus either based on the rules and standards set out in the FinSA and the FinSO (in particular the annexes to the FinSO) or based on the rules as they were in force and effect until the end of 2019 (i.e. the Swiss Code of Obligations and the previous listing rules of the relevant trading venue).
Regulations of the review bodies
Six Exchange Regulation and BX Swiss have already published their final regulations regarding the procedure for the review and approval of securities prospectuses.
Among other procedural matters, such regulations include information on the requirements for approval or automatic approval of non-Swiss prospectuses. Under the FinSA, the review body may approve a prospectus that has been prepared based on a non-Swiss prospectus regime if such non-Swiss regime meets international standards and provides equivalent disclosure standards. The regulations of the review bodies provide that prospectuses approved in certain non-Swiss jurisdictions (currently EU/EEA, United Kingdom, U.S. and Australia) will be automatically approved in Switzerland, provided the relevant prospectus has been approved in the relevant home jurisdiction for use with all types of investors (i.e. including retail investors). The regulations of the prospectus review bodies also provide for lists of recognized accounting standards and recognized non-Swiss trading venues.
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