The essentials of Swiss ad hoc publicity and its role in ensuring fair, transparent financial market practices.
Ad hoc publicity, an important pillar of financial market transparency, refers to the timely and accurate disclosure of price-sensitive facts of issuers on the Swiss stock exchanges. In Switzerland, as in many other countries, the disclosure of price-sensitive facts is essential to ensure fair and informed trading.
What is the Regulatory Framework in Switzerland?
The Swiss stock exchanges (SIX Swiss Exchange and BX Swiss) together with the Swiss Financial Market Supervisory Authority (FINMA) establish and enforce regulations to ensure the transparency of the Swiss financial markets. The detailed disclosure requirements for listed companies are defined in the Listing Rules and ad hoc publicity rules.
Key elements of the Swiss regulatory framework include:
- Ad hoc Announcements: Listed companies are obliged to publish an ad hoc announcement as soon as the company becomes aware of the essential elements of a price-sensitive fact. This includes financial figures, changes in the board of directors, the management or the staff, mergers & acquisitions, restructuring operations, changes in capital, changes in business operations and significant changes to shareholder structure.
- Designated Media for Disclosure: Ad hoc announcements must be sent to the stock exchange, but also to at least two electronic financial news services and two Swiss media (printed or electronic). The announcement must also appear on the listed company’s website and must be sent to interested market participants by email. This ensures that the price-sensitive fact reaches the widest audience possible.
- Principle of equal treatment: The listed companies must ensure that all market participants have the same opportunity to become aware of price-sensitive fact. The disclosure of price sensitive facts to a particular group of individuals such as journalists or analysts before publishing an ad hoc announcement constitutes a violation of the rules on ad hoc publicity.
How can companies in Switzerland ensure compliance with ad hoc publicity rules?
Maintaining compliance with Swiss ad hoc publicity rules requires careful planning and execution. Here are some essential considerations for companies listed in Switzerland:
- Assessment: Deciding whether or not the disclosure of a fact is capable of triggering a significant price change can be challenging. Listed companies should implement a well-structured process and criteria individually adapted to the company for assessing the significance of a fact.
- Flagging: The disclosure of information on price-sensitive facts must begin with the classification as “ad hoc announcement pursuant to Art. 53 LR”.
- Timing: Price sensitive-facts must be disclosed in a timely manner, ensuring that all market participants have equal access to it. Any delay could result in a breach of the rules.
- Content: Ad hoc-announcements should be factual, clear and complete. The content must be formulated in such a way that the market participants can form an opinion to which the content is price-sensitive.
- Translation: The ad hoc announcement must either be available in German, French or English. The ad hoc announcement may also published in several language versions. In this case, attention must be paid to the simultaneous distribution of the ad hoc announcement to all addressees.
Why is ad hoc publicity crucial for transparency and trust in Swiss Financial Markets?
Ad hoc publicity in Switzerland is not just a regulatory obligation and avoiding legal consequences; it’s a cornerstone of transparency and trust in the financial markets. Listed companies that assume its responsibility by promptly disclosing price-sensitive facts and adhering to the regulatory framework are better positioned to build and sustain market confidence.
Nevertheless, the regulatory bodies of the Swiss stock exchanges monitor compliance with disclosure obligations for listed companies such as ad hoc publicity. If regulations are breached, the regulatory bodies initiate sanctions proceedings. The regulatory bodies can impose sanctions on issuers, which range from reprimands, suspension, expulsion, revoking of registration, suspension of trading and delisting, to fines of up to CHF 10 million. How can we help?
As a recognised representative, our registered specialists Alexander Lindemann and Ariel Sergio Davidoff as well as our specialist Raphael Züger advise on all transactions on the SIX Swiss Exchange and BX Swiss and on compliance with the disclosure requirements under stock exchange law. We also offer comprehensive support to listed companies with regard to the implementation of a framework and assessing price-sensitive facts. Contact our specialists – we look forward to hearing from you.
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