I OVERVIEW

i Sources of law

In Switzerland, the law of securities is composed of a multitude of statutes, pertaining to private, public and criminal law.

In the context of private law, relevant provisions are found first of all in the Swiss Code of Obligations (CO). Article 41 CO is the basic torts provision. In contract law, the provisions on agency in Article 394 et seq. CO, including Article 11 of the Federal Act on Stock Exchanges and Securities Trading (SESTA) regulating securities traders' behaviour stand out. Finally, the provisions with regard to companies limited by shares in Article 620 et seq. CO, concerning negotiable securities in Article 965 et seq. CO, and on debt securities issued as bonds in Article 1156 et seq. CO are relevant.

Civil domestic litigation is regulated in the Swiss Civil Procedure Code (CPC) and the Federal Statute concerning the Federal Supreme Court (SCS). With regard to international litigation, in particular, the International Private Law Act (PILA), the Lugano Convention (LC) and numerous international treaties are relevant.

In the field of public law, securities are governed by the Federal Act on Financial Markets Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIA). Further, the Collective Investment Schemes Act (CISA) may also be applicable. The organisation of the Swiss Financial Market Supervisory Authority (FINMA) and its supervisory instruments are set out in the Financial Market Supervision Act (FINMASA). On 15 June 2018, the Swiss Parliament adopted the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). The two new acts will likely enter into force on 1 January 2020. As the implementing ordinances are not yet finalised, they are discussed in a cursory manner in Section VI.

The administrative procedure is regulated in the Administrative Procedure Act. When it comes to the prosecution of criminal offences under the FMIA, the Swiss Criminal Procedural Code (SCP) and the Federal Act on the Organisation of the Criminal Prosecution Authorities regulate the criminal procedure and the competent authorities.

ii Regulatory authorities

FINMA is given certain limited general powers and tools to enforce the provisions of the FMIA2 and additional specific instruments, such as, for example, to proceed against the failure to disclose shareholdings, insider trading and market manipulation.3 It should be noted, however, that there is presently no Swiss authority that reviews issue prospectuses (as opposed to listing prospectuses, which are reviewed by the exchange where listing is sought, such as, in particular, the SIX Swiss Exchange). Under the FinSA a prospectus will have to pass scrutiny by a specially admitted auditor.4

While FINMA is entitled to take administrative measures under the FMIA, the Federal Department of Finance is generally responsible for prosecuting violations of the criminal provisions of the financial market acts, unless provided otherwise.5 The Attorney General of Switzerland is entrusted with the prosecution of market manipulation and insider trading.6

iii Common securities claims

Lawsuits for breaches of securities law are rare in Switzerland. Consequently, there are only a few precedents available. There may be several reasons for such little case law, including:

  1. the cost of litigation is high, with a prohibition of contingency fees and a loser-pays rule;
  2. there are no instruments for mass claims; and
  3. the burden of proof lies often on the investor, leading to a high litigation risk and a rather litigation-adverse attitude.

On 2 March 2018, the Swiss Federal Council published a draft amendment of the CPC that should address these shortcomings.

As there is no public supervision of securities offerings, the public enforcement of securities claims mainly relates to matters such as insider trading,7 market disruption,8 reporting duties,9 the duty to make an offer,10 and wrong or missing information in a prospectus.11

II PRIVATE ENFORCEMENT

i Forms of action

Prospectus liability

The basic provision for actions regarding prospectus liability is set out in Article 752 CO, which reads as follows:

Where information that is inaccurate, misleading or in breach of statutory requirements is given in issue prospectuses or similar statements disseminated when the company is established or on the issue of shares, bonds or other securities, any person involved whether wilfully or through negligence is liable to the acquirers of such securities for the resultant losses.
Scope of application

Article 752 CO may apply when two prerequisites are fulfilled. First, a company must issue securities, that is, through creating or increasing equity capital or by raising debt. All categories of securities may be relevant, as long as they are issued to an extended number of investors.12 The provision only applies to a securities issue on the primary market, namely initial public offerings and fixed price underwritings. It does not, however, apply to secondary placements where an investor sells his or her securities to the public.13

Second, an issue prospectus or a similar statement has been published no matter of whether there is a statutory duty or whether it was published voluntarily. Prospectus liability also applies to omissions, when there is a failure in complying with the legal obligation of publishing an issue prospectus.14

The issue prospectus is a written document drafted by the issuer to inform potential investors about the intended transaction (sale, subscribing, purchase) and to invite them to participate in the transaction.15 The duty to publish an issue prospectus and its required content are defined in Article 652a CO (concerning shares) and Article 1156, Paragraph 1 CO (concerning bonds). 'Similar statements' refers to any information provided by the issuer to potential investors, as far as the information relates to the issue and serves as a means of information, advertisement or guarantee.16

Loss

Damages are calculated based on the 'theory of difference', comparing the aggrieved party's financial situation with the hypothetical financial situation if the harming event had not occurred.17 In the frame of prospectus liability, damages usually occur only after the public learns of the inadequacy of the information provided in the prospectus.18 They are calculated as the difference between the actual paid issue price based on the flawed prospectus and the actual price after the public learns about its inadequacy, factoring out general market developments.19

Violation of duty

Liability under Article 752 CO applies if information is inaccurate (i.e., not objectively correct), misleading (i.e., conceals or omits relevant facts) or in breach of a statutory duty (i.e., if it does not comply with statutory prerequisites,20 in particular if it is incomplete21).

Apart from corporate law, liability may be based on tort in accordance with Article 41 CO.22 Liability in tort requires violation of a provision protecting the concerned financial asset, in particular, Article 152 Criminal Code regarding false statements about commercial businesses. Remarkably, exploitation of insider information23 or market manipulation24 are said to serve the aim of equal treatment of all investors and the protection of the market's efficiency and may, therefore, not serve as basis for a tort claim.25

Another basis for a damages claim may be breach of trust.26 Requirements are a special relationship between the investor and the liable person, creating legitimate expectations of the investor and disloyal disappointment of such expectations.27 In a landmark decision, the Federal Supreme Court held that an expert may be liable to a third party based on created expectations even if there is only an indirect connection, for example, if the customer or client passes on the expert report to a third party and the expert could have anticipated the dissemination.28

Causation

For causation, there is a distinction between actual cause and legally proximate cause.29 In the context of prospectus liability, causation reflects two aspects. On one hand, the violation of duty must have caused the claimed damages (actual cause). On the other hand, there is the question whether the inadequacy in the prospectus actually influenced the decision to acquire the securities for the respective price (legally proximate cause).30

With regard to the latter, the investor must prove reliance on inadequate information provided by the prospectus, and that he or she would not have purchased the securities, or would have done so at a lower price with adequate information.31 Since it is usually not possible to strictly prove causation, the Swiss Supreme Court ruled that a lower standard of proof shall apply for causation, namely preponderant probability.32

In cases where the liability is based on the failure to publish a prospectus or to disclose certain information, the investor must demonstrate that there was a duty to act. There is causation if compliance would have prevented the loss or if it influenced the decision to acquire the securities.33

Fault

A party may only become liable when at fault. Fault includes both intentional and negligent actions. The scale that is applied to fault is an objective one as compared with the skills and knowledge of an average reasonable person acting in the market.

With regard to prospectus liability, the Swiss Supreme Court held that it is not negligent if the involved persons rely on experts (such as lawyers) and that only the underwriting bank may have a (limited) duty to verify the information provided by the issuer.34

Standing to sue and to be sued

In accordance with Article 752 CO, anyone who purchases securities can act as claimant. This includes not only the first buyer but also any later acquirer as far as the information in the prospectus was causal for the decision to acquire the securities.35 The body of creditors36 and the company itself are not entitled to sue.37

Any person involved in drafting or disseminating the prospectus or similar statement can be sued. This may include lawyers, advisers, rating agencies, consortium banks and financial institutions.38 Finally, the issuer itself may also be a defendant.39

Burden of proof

The Swiss Supreme Court qualified the legal nature of prospectus liability as a liability in tort and denied contractual liability.40 This qualification imposes on the investor carrying the burden of proof for all requirements for liability under Article 752 CO, including loss, violation of duty, causation and the issuer's fault.

Statute of limitations

The statute of limitations is set out in Article 760 CO. Claims for damages are time-barred five years after the date on which the acquirer learned of the loss and the person liable for it (relative time limit). In any event, the claim becomes time-barred 10 years after the date of the act causing the loss (absolute time limit). In the event the claim is derived from a criminal action for which the criminal law stipulates a longer statute of limitations, the latter also applies to the civil claim.

Breach of simple agency agreement

Investors often seek advice before buying securities or delegate portfolio management. Investors may bring actions for damages claiming that the portfolio management41 or the investment advice was not diligent or was not in the investor's interest. The underlying legal relationship is subject to the provisions of simple agency pursuant to Article 394 et seq. CO. Thus, claims against asset managers, investment advisors and securities dealers will often be based on an alleged breach of simple agency agreements.

Loss

Loss is calculated by comparing the investor's actual financial position with the position as it would have been if the required care and loyalty had been applied and the simple agency agreement had, hence, been fulfilled properly. The amount that may be claimed consists of both the reduction of assets due to improper investment and loss of profit.42

Violation of duty

Liability may arise based on Article 398(2) in connection with Article 97(1) CO:

  1. violation of the duty of care;
  2. breach of the obligation of loyalty; or
  3. failure to comply with investor's instruction.43

In the field of asset management and investment advice, the duty of care is specified, inter alia, in the Portfolio Management Guidelines44 issued by the Swiss Bankers Association. Although these guidelines constitute self-regulation (rather than statute) and target Swiss banks, they may be considered as general standards of care with regard to securities dealers.45

The stock exchange law specifies in addition the obligations under the simple agency agreement in the field of securities transactions. Article 11(1)(a) SESTA stipulates a duty to provide information on the risks that are linked to certain types of transactions. This provision qualifies both as public and as private law and a violation may be claimed by the public authorities and the contracting parties.46

One of the common subjects of dispute is whether the violation of duty was ratified, for example, if the investor never objected against the custody account statements that were duly delivered.47

Causation

Causation under the simple agency agreement requires both actual cause and legal proximate cause.48 The investor will have to show that the loss would not have occurred or would be lower if the financial intermediary had acted in compliance with his or her contractual duties. Under simple agency law, preponderant probability rather than strict proof is sufficient to establish legal proximate cause.49

Fault

Any degree of fault is sufficient for a claim under an agency agreement. It is common practice that financial intermediaries exclude liability for slight negligence in the agreement.50

Standing to sue and to be sued

Any investor who is party of the simple agency agreement is entitled to raise damages claims based on breach of contract. On the other hand, any financial intermediary who is a party of the respective simple agency agreement may be sued.

Burden of proof

An investor claiming damages owing to breach of simple agency agreement must prove his or her loss, a violation of duty and causation. Fault is presumed, and it is up to the financial intermediary to exonerate him or herself.

Statute of limitations

Claims for damages become time-barred at 10 years51 after the loss occurred.52

ii Procedure

In domestic proceedings, a claimant may file an action for prospectus liability either with the court at the respondent's domicile or registered office, or at the court at the office of the company issuing the securities.53 In a canton with a commercial court,54 the commercial court may be competent.55

In most cases, court proceedings are preceded by mandatory conciliation proceedings,56 unless a commercial court has jurisdiction. In addition, the claimant may unilaterally waive conciliation proceedings if the other party resides abroad.57 In the event the respondent agrees and the amount in dispute is above 100,000 Swiss francs, the parties may waive the proceedings at the first instance and initiate proceedings directly at the cantonal appellate court.58

Decisions of the first instance may be appealed to the cantonal appellate courts,59 followed by appeal to the Swiss Federal Court60 whose review, however, is basically limited to legal issues.61

Swiss law does not provide for class actions. The remedies for collective enforcement are very limited. With regard to damages claims, the only option is that claimants with similar or identical claims may together file an action for damages62 or the courts may join several proceedings in one proceeding.63 A group action according to Article 89 CPC is directed at protection of personality rights and enables the group only to request prohibition of a violation, or the ending of an ongoing violation, or the establishment of a violation, but no claim for damages.

Legal costs are usually imposed on the unsuccessful party.64 They include court costs and the reimbursement for attorney's fees. Both are determined based on cantonal tariffs that reflect the amount in dispute and the complexity.65 Contingency fee arrangements are prohibited.

iii Settlements

Settlements can be concluded anytime, out of court or in court. In-court settlements qualify as surrogate court decisions66 that are enforceable and have res judicata effect.67

Claims in the context of corporate liability68 often include multiple persons who are jointly and severally liable (Article 759 CO), for which reason settlements require particular attention. It is strongly debated whether a settlement only between some of the involved persons but not all would have erga omnes effect, meaning that it has effect beyond the parties of the settlement. Thus, even if a settlement is reached, as long as not all potentially liable persons agree to the settlement, the risk of recourse claims exists and can hardly be excluded.69

iv Damages and remedies

See Section II.i at 'Loss'.

III PUBLIC ENFORCEMENT

i Forms of action

The key provisions with respect to public enforcement of securities transactions relate to insider trading, market manipulation, reporting duties, the duty to make a public offer and the duty to provide a prospectus for collective investment schemes. In the event of any breach, administrative measures and criminal sanctions may be imposed.

Insider trading

Article 142 FMIA provides that any person who knows or should know that information constituting insider information or who has a recommendation that he or she knows or should know is based on insider information behaves inadmissibly when he or she:

  1. exploits it to acquire or dispose of securities listed in Switzerland or to use financial instruments derived from such securities;
  2. discloses it to another; or
  3. exploits such information to make a recommendation to another person to acquire or dispose of securities listed in Switzerland or to use financial instruments derived from such securities.

A corresponding, but slightly more restrictive, criminal provision is set forth in Article 154 FMIA.

Market manipulation

Article 143 FMIA provides that a person behaves inadmissibly when he or she publicly disseminates information that he or she knows or should know gives false or misleading signals regarding the supply, demand or price of securities listed in Switzerland, or carries out transactions or purchase or sale orders that he or she knows or should know give false or misleading signals regarding the supply, demand or price of securities admitted on a trading venue in Switzerland. The FMIA also sets forth a criminal provision on market manipulation with a narrower scope.70

Reporting duty

Anyone who directly or indirectly or acting in concert with third parties acquires or disposes of shares or purchase or sale rights relating to shares of a company with a registered office in Switzerland whose equity securities are listed in whole or in part in Switzerland, or of a company with a registered office abroad whose equity securities are mainly listed in whole or in part in Switzerland, and thereby reaches, falls below or exceeds the thresholds of 3, 5, 10, 15, 20, 25, 33⅓, 50 or 66⅔ per cent of the voting rights, whether exercisable or not, must notify this to the company and to the stock exchanges on which the equity securities are listed.71

Duty to make an offer

Anyone who directly, indirectly or acting in concert with third parties acquires equity securities which, added to the equity securities already owned, exceed the threshold of 33⅓ per cent of the voting rights of a target company, whether exercisable or not, must make an offer to acquire all listed equity securities of the company. Target companies may raise this threshold to 49 per cent of voting rights in their articles of incorporation.72

Non-licensed banking activity

Professional acceptance of public funds is reserved to banks licensed by FINMA,73 with a specific exclusion for bond issues. However, if the prospectus does not provide for all required information, the issuer runs the risk of FINMA finding non-licensed banking activity and sanctioning the issuer.

ii Procedure

FINMA may initiate administrative procedures to sanction the above duties. The proceedings are governed by the Federal Act on Administrative Procedures of 20 December 1968. In contrast, the Federal Department of Finance may initiate criminal procedures and impose criminal sanctions in the event criminal provisions of the FMIA are violated,74 save that the Attorney General of Switzerland is responsible to prosecute certain offences, such as the criminal offence of insider trading and market manipulation.75 The Federal Act on Administrative Criminal Law of 22 March 1974 (ACL) applies to procedures conducted by the Federal Department of Finance while the SCP applies to procedures conducted by the Attorney General of Switzerland.76

If the Federal Department of Finance is of the view that the requirements for a custodial sentence or a custodial measure are met, the offence is subject to federal jurisdiction. In such a case, the Federal Department of Finance will refer the files to the office of the Attorney General of Switzerland for proceedings before the Federal Criminal Court.77

iii Settlements

FINMA

Swiss law does not provide for any specific settlement procedures with FINMA. However, in practice, before opening a formal procedure pursuant to Article 30 FINMASA, FINMA initiates an informal preliminary investigation and when concluded makes an informal proposal to the person concerned on how the matter can be settled without the need (and risks) of a formal procedure. Typically, this applies in cases where no major regulations have been breached and often results in the resignation of the person in question from any managerial functions in the financial industry for a number of years.

Criminal authorities and Federal Department of Finance

There is only limited room for settlements in criminal investigations. Articles 52–54 of the Criminal Act provide for possibilities to refrain from prosecution in exceptional circumstances. In cases where financial loss was caused, and the offender made reparation for the injury or made every reasonable effort to right the wrong he or she has caused, the criminal authorities may in particular refrain from prosecution if the requirements for a suspended sentence (i.e., custodial sentence of no more than two years) are fulfilled and if the interests of the general public and of the persons harmed in prosecution are negligible.78 These provisions apply, by reference, also to the ACL.

iv Sentencing and liability

Administrative sanctions

FINMA is given supervisory tools under Article 29 et seq. FINMASA. Among others, FINMA may require information, restore compliance with the law, issue a declaratory ruling, prohibit a person from practising a profession, publish a ruling, confiscate any profit or revoke a licence, withdraw a recognition and cancel a registration.

If the duty to report shareholdings is violated, insider information is misused or the market manipulated, FINMA may issue a declaratory ruling, publish the supervisory ruling or confiscate any profit.79

If shareholdings are not reported, FINMA may, until the duty has been complied with, suspend voting and associated rights and prohibit the person concerned from acquiring further shares or purchase or sale rights relating to shares of the company, be it directly, indirectly or acting in concert with third parties.80

Criminal penalties

A criminal misuse of insider information or market manipulation may result in a penalty of up to 810,000 Swiss francs or imprisonment of up to three years.81 If the profit exceeds 1 million Swiss francs, imprisonment may be up to five years.

Penalties up to 10 million Swiss francs may be imposed in cases where the duty to disclose shareholdings or the duty to make an offer are wilfully violated.82

Wilfully providing false information or withholding information in a prospectus with respect to collective investment schemes may result in a fine of up to 810,000 Swiss francs or imprisonment up to three years.83

Cooperation between FINMA and prosecution authorities

FINMA and the competent prosecution authority are obliged to exchange the information needed in connection with their collaboration and to fulfil their tasks. They have to use the information received exclusively to fulfil their respective tasks and coordinate their investigations to the extent practicable and required.

Where FINMA obtains knowledge of common law felonies and misdemeanours or of offences against a financial market act, it has to notify the competent prosecution authorities (Article 38 FINMASA).

IV CROSS-BORDER ISSUES

i Private enforcement

Questions of jurisdiction and of applicable law for international cases are governed in Switzerland mainly by the PILA and the LC. Procedural matters like the taking of evidence or the service of judicial documents may also be subject to international conventions.84

With regard to most European states, the LC governs jurisdiction. The LC does not provide a special provision for securities litigation. In principle, the claimant may choose to sue in the country where the defendant is domiciled,85 or in a special jurisdiction depending on the legal nature of the claim. If the claim concerns contractual matters,86 there is a special jurisdiction at the place of performance. In tort matters, a special jurisdiction at the place where the harmful event occurs or might occur may be relied on.87 Finally, there is a mandatory jurisdiction in favour of consumers.88

The PILA governs, inter alia, the jurisdiction with regard to disputes involving parties from states other than the contracting states of the LC. Similarly to the LC, the PILA provides for the option either to sue at the place of the defendant's residence89 or at a special jurisdiction at the place of performance90 or at the place where the harmful action was executed or the injury resulted.91 Like the LC, the PILA also provides for mandatory consumer jurisdiction.92 Contrary to the LC, the PILA provides for additional special jurisdictions for corporate matters, such as prospectus liability, or liability for administration, business management and liquidation or auditors' liability. Thus, a claimant may also sue at the courts of the registered office of the concerned company,93 or at the place of issue of the securities.94

The applicable law also depends on the qualification of the legal nature of the respective claim. If the claim qualifies as contractual, in principle, the law of the state applies where the performance is rendered.95 If the investor is considered a consumer, the law at his or her usual place of residence will apply.96 If the action is based on tort and the parties have a common habitual residence, the law of that place applies.97 Otherwise, the law of the state where the harmful action was taken, or where the harmful event occurred, may apply.98

For liability related to corporate law, the law applying to the concerned company, or the law at the place of issue of the securities may apply.99

ii Public enforcement

Cross-border issues may arise if a foreign entity violates a financial market act, such as the FMIA or the CISA.

The FMIA is applicable, among others, to securities listed in Switzerland, irrespective of the domicile of the parties involved. The CISA is applicable, among others, to Swiss collective investment schemes and to foreign collective investment schemes that are distributed in Switzerland.

In order to enforce the financial market acts against a foreign entity, FINMA may ask foreign financial market supervisory authorities for assistance100 or may itself carry out audits of supervised persons and entities abroad or have such audits carried out by audit agents.101

V YEAR IN REVIEW

By a judgment of 17 December 2018,102 the Swiss Federal Administrative Court decided an appeal against an enforcement decision by FINMA. A company engaged in asset management used funds received from investors for funding a capital increase. The Court confirmed the decision of FINMA to liquidate the company because of non-licensed public acceptance of funds, that is, non-licensed banking activity, and held that the original acceptance of funds qualified as a case of Article 752 CO. The decision underlines the importance of strict compliance of the prospectus with all legal requirements of a bond issue.

A topic of hot debate in the past year was whether initial coin offerings (ICOs) qualify as securities and whether under which conditions ICOs should be subject to securities regulations.103 No related litigation has entailed so far, however.

VI OUTLOOK AND CONCLUSIONS

The current financial market acts have significant shortcomings in the area of code of conduct and product regulations. The prospectus duty for financial products is dispersed throughout various laws and regulations and lacks consistency. Owing to the enormous size of most of the prospectuses, an assessment of the product is difficult, and (other than in the area of collective investment schemes) concise product documentation that is easy to understand is hardly available. The options for clients to assert their rights are severely restricted and entail high-cost risks. Different degrees of regulation and supervision apply to the various financial service providers for no apparent reason. Accordingly, the current laws lack sufficient client protection and equal competitive conditions.

To solve these shortcomings, the bills of two new laws, namely the FinSA and the FinIA, were passed by Parliament on 15 June 2018. The FinSA and the FinIA will likely enter into force on 1 January 2020 and shall create uniform competitive conditions for financial intermediaries and improve client protection.

The FinSA is, to a large extent, based on EU law (MiFID, Prospectus Directive, PRIPs project) with adjustments made to reflect specific Swiss circumstances. The FinSA encompasses cross-sector rules for offering financial services and distributing financial instruments and provides clients with the necessary tools to assert their claims. The three main client segments are private clients, professional clients and institutional clients. The FinSA introduces a uniform prospectus duty for securities that are publicly offered or traded on a trading platform.104 The law provides for various exemptions, depending on the offer itself (e.g., its addressees, the number of addressees, value) and the type of securities offered.105 Among others, offers addressed to professional clients only would not require a prospectus. The FinSA also sets forth a prospectus duty for open and closed collective investment schemes.106 In contrast to the existing legislation (but in line with EU law), any prospectus needs to be submitted to an independent audit body107 for review and approval before its distribution.108 In addition to a prospectus, a key information document has to be supplied for most financial instruments offered to private clients.109 It shall enable private clients to make informed investment decisions and to truly compare various financial instruments in a simple and comprehensible way.

The FinIA essentially harmonises the authorisation rules for financial service providers. In contrast to the existing laws, it introduces a prudential supervision of managers of individual client assets, managers of the assets of occupational benefits schemes and trustees.

The Swiss Federal Council published drafts of the ordinances on FinSA and FinIA on 24 October 2018 for public comments. The final versions of the ordinances are yet to be published.

Strengthening enforcement is a hot topic in Switzerland. On 2 March 2018, the Federal Council published a draft amendment of the CPC for public comment, intending to reduce legal costs for claimants, to facilitate group actions by an association to claims for damages (opt-in) and to provide for a new procedure for group settlements (opt-out). It is too early to speculate whether such amendments will make it into law.


Footnotes

1 Jodok Wicki is the managing partner, Kaspar Landolt is a partner and Dominique Gemperli is a counsel at CMS von Erlach Ltd. Susanna Gut, a former associate at CMS von Erlach Poncet Ltd, contibuted to the fourth edition of this chapter.

2 Article 29 et seq. FINMASA.

3 Article 144 et seq. FMIA.

4 Articles 51 et seq. FinSA.

5 Article 50, Paragraph 1 FINMASA.

6 Article 156, Paragraph 1 FMIA.

7 Article 154, FMIA.

8 Article 155, FMIA.

9 Article 151, FMIA.

10 Article 152, FMIA.

11 Article 148, Paragraph 1 Litera. f CISA.

12 Including shares, bonds, participation certificates, convertible bonds and convertible options bonds. Watter, Basler Kommentar: Article 530-964 OR (Honsell, Vogt and Watter (eds.), Fifth Edition, Basle, 2016), Article 752 No. 4.

13 Reutter, 'IPO – Ablauf, Struktur, Haftung und Schadloshaltung' in Vol. 144, Kapitalmarkttransaktionen VIII (Reutter and Werlen (eds.), Zurich, Basle and Geneva; Europa Institut Zurich, 2014), p. 41.

14 Watter, (footnote 11), Article 752 No. 5.

15 Watter, (footnote 11), Article 752 No. 5.

16 Watter, (footnote 11), Article 752 No. 14.

17 Schwenzer, Schweizerisches Obligationenrecht, Allgemeiner Teil (Seventh Edition, Berne, 2016, No. 14.03.

18 Reutter, (footnote 12), p. 49 with further reference.

19 Watter, (footnote 11), Article 752 Nos. 22, 24.

20 As set out in Articles 652a, 653d–653f, 656a and 1156 CO and the Listing Rules of the SIX Swiss Exchange. With regard to open-ended collective investment scheme Articles 75–77 CISA determine the prospectus duties.

21 Watter, (footnote 11), Article 752 No. 18 et seq.

22 Dieter Gericke/Stefan Waller, (footnote 39), Article 754 No. 24.

23 Article 154 FMIA.

24 Article 155 FMIA.

25 Decision of the Swiss Federal Criminal Court dated 12 September 2018 No BB.2017.123, Cons. 1.5. with regard to insider information. The considerations there are applicable also to market manipulation.

26 Liability based on created expectations includes also liability concerning the breach of pre-contractual duties when negotiating a contract, known as culpa in contrahendo, Thomas Jutzi, Unternehmenspublizität Grundlinien einer rechtlichen Dogmatik zur Offenlegung von unternehmensbezogenen Informationen, 2017, No. 581 w.f.r.; Hans Capsar von der Crone/Olivier Baum, Aktienrechtliche Verfahren: Klagemöglichkeiten und Klagerisiken, GesKR 2016, pp. 278, 290; Dieter Gericke/Stefan Waller, Basler Kommentar: Articles 530–964 OR (Honsell, Vogt and Watter (eds.), Fifth Edition, Basle, 2016), Article 754 No. 24.

27 DFT 134 III 390, 395.

28 DFT 130 III 345, Cons. 2.1 et seq.

29 DFT 132 III 718, Cons. 2.1.

30 Watter, (footnote 11), Article 752 No. 26.

31 DFT 132 III 718, Cons. 2.1. and Cons. 3.2.

32 DFT 132 III 718, Cons. 3.2.1.

33 BGE 123 III 110, Cons. 3(a).

34 DFT 129 III 71, 75 et seq.

35 DFT 131 III 306, Cons. 2.1.

36 DFT 113 II 283, 289 et seq.

37 Watter, (footnote 11), Article 752 Nos. 9, 9a.

38 Watter, (footnote 11), Article 752 No. 10.

39 Watter, (footnote 11), Article 752 No. 11.

40 DFT 129 III 71 Cons. 2.5.

41 In the frame of the portfolio management, the asset manager has the obligation to make the investment decisions and adopt the investment strategy. Whereas an investment advisor is only supposed to give investment advice but not act on its own, Christoph Gutzwiller, Schadensstiftung und Schadensberechnung bei pflichtwidriger Vermögensverwaltung und Anlageberatung, SJZ 2005, 359.

42 Christoph Gutzwiller, Schadensstiftung und Schadensberechnung bei pflichtwidriger Vermögensverwaltung und Anlageberatung, SJZ 2005, 357, 362.

43 These obligations are based on Article 398(2) CO. Christoph Gutzwiller, Schadensstiftung und Schadensberechnung bei pflichtwidriger Vermögensverwaltung und Anlageberatung, SJZ 2005, 357, 360.

44 See Portfolio Management Guidelines 2017, 20170301-3200-ALL-RL_Mini_Revision_Portfolio%20Management%20Guidelines_E_final-CLA.pdf, available at http://www.swissbanking.org/en/services/library/guidelines?set_language=en (visited on 13 March 2018).

45 Christoph Gutzwiller, Schadensstiftung und Schadensberechnung bei pflichtwidriger Vermögensverwaltung und Anlageberatung, SJZ 2005, 357, 358.

46 Eric Sibbern/Hans Caspar von der Crone, Informationspflichten im Anlagegeschäft Entscheid des Schweizerischen Bundesgerichts 4C.270/2006 (BGE 133 III 97) vom 4 January 2007 i.S X (Kläger und Berufungskläger) gegen Y AG (Beklagte und Berufungsbeklagte), SZW 2007, 173, 174.

47 Christoph Gutzwiller, Schadensstiftung und Schadensberechnung bei pflichtwidriger Vermögensverwaltung und Anlageberatung, SJZ 2005, 357, 361.

48 Wolfgang Wiegand, Basler Kommentar: Article 1-529 OR (Honsell, Vogt and Wiegand (eds.), Sixth Edition, Basle, 2015), Article 97 No. 41.

49 DFT 120 II 250.

50 Based on Article 100(1) and Article 100(2) CO, liability may not be excluded for unlawful intend or gross negligence in advance.

51 Article 127 CO.

52 DFT 130 III 597.

53 Article 40 CPC.

54 There are commercial courts in the cantons of Aargau, Berne, St Gallen, Zurich.

55 Pursuant to Article 6, Paragraph 1 and 2 CPC the dispute must be decided by the commercial court if it concerns commercial activity of at least one party (which will always be the case with regard to Article 752 CO), the decision is subject to an appeal with the Swiss Federal Court (if the amount in dispute is of at least CHF 30,000), and the parties are registered in a commercial registry. In cases where only the respondent is registered in a commercial registry and all the other prerequisites are met, the claimant may choose between the commercial court and the district courts.

56 Article 197 et seq. CPC.

57 Article 198 lit. f and 199 CPC.

58 Article 8 CPC.

59 Article 308 et seq. CPC.

60 Article 72 SCS.

61 Article 95 et seq. SCS.

62 Article 71 CPC.

63 Article 125 lit. c CPC.

64 Article 106 CPC.

65 Article 96 CPC.

66 Article 208(2) and Article 241(2) PILA.

67 Thomas Sutter-Somm, Schweizerisches Zivilprozessrecht, Third Edition, Zurich, 2017, p. 303 et seq.

68 Namely, the prospectus liability or the liability for administration, business management and liquidation, the auditors' liability (Article 752 et seq. CO).

69 See for the discussion of this issue and possible solutions, Reto Thomas Ruoss, Vergleiche bei Verantwortlichkeitsklagen: Praktische Probleme, 2008; Peter Isler, Der aussergerichtliche Vergleich mit einzelnen aktienrechtlich verantwortlichen Organpersonen, Wirtschaftsrecht zu Beginn des 21. Jahrhunderts, Robert Waldburger/Charlotte M Baer/Ursula Nobel/Benno Bernet (eds.), Berne, 2005, p. 199 et seq.

70 Article 155 FMIA.

71 Article 120 FMIA.

72 Article 135 FMIA.

73 Article 1, Paragraph 2 Act on Banks and Savings Banks.

74 Article 50, Paragraph 1 FINMASA.

75 Article 156, Paragraph 1 FMIA.

76 Article 50, Paragraph 1 FINMASA and Article 1 of the SCP.

77 Article 50, Paragraph 2 FINMASA.

78 Article 53 of the Criminal Act.

79 Article 145 FMIA.

80 Article 144 FMIA.

81 Article 154 et seq. FMIA.

82 Article 151 et seq. FMIA.

83 Article 148 Paragraph 1 lit. f CISA.

84 For example, the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters or the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.

85 Article 2(1) LC.

86 Article 5(1)(b) LC.

87 Article 5(3) LC.

88 Article 15 LC.

89 Article 2 PILA.

90 Article 113 PILA.

91 Article 129 PILA.

92 Article 114 PILA.

93 Article 151(1) and (2) PILA.

94 Article 151(3) PILA. The jurisdiction at the place of issue of securities may not be excluded by a forum clause.

95 Article 116 PILA.

96 Article 120 PILA.

97 Article 133(1) PILA.

98 Article 133(2) PILA.

99 Article 156 PILA and Article 154 PILA.

100 Article 42 et seq. FINMASA.

101 Article 42, Paragraph 1 FINMASA.

102 Case No. B-117/2018.

103 Aufsichtsmitteilung 04/2017 of 29 September 2017 by FINMA.

104 Article 37 draft FinSA.

105 Article 38 et seq. draft FinSA.

106 Articles 50 and 51 draft FinSA.

107 Prüfstelle.

108 Article 53 FinSA.

109 Article 60 et seq. draft FinSA.