Disclosure Rules In Motion - The Disclosure Office At SIX Swiss Exchange Publishes Its 2013 Annual Report

• The number of possible breaches declined in proportion to the number of disclosure notifications.
• In the year under review, the Swiss Federal Supreme Court delivered an important judgment relating to the disclosure rules. Disclosure obligations were thereby relaxed, which has a negative impact on the desired degree of transparency.

Number of notifications up, number of potential breaches down

Compared with the previous year, the number of disclosure notifications rose almost 30% to 1,240 in the year under review (2012: 960). In the course of its work, the Disclosure Office noted 103 possible breaches of the reporting obligations. This number was much the same as in the previous year (108). There was thus a significant decline in the number of potential breaches as a proportion of the number of notifications.

One probable reason for this was that the Swiss Financial Market Supervisory Authority (FINMA) and the Federal Department of Finance (FDF) tightened up their enforcement of the obligation to disclose shareholdings, thus prompting those subject to reporting requirements to discharge their duties more conscientiously.

Landmark ruling by the Swiss Federal Supreme Court

A significant Supreme Court judgement in the area of disclosure rules was given in the year under review. The version of the Stock Exchange Ordinance-FINMA currently in force states that persons who are permitted freely to exercise voting rights in respect of shares without being the beneficial owner of these shares (e.g. asset managers) are subject to disclosure obligations. The Federal Supreme Court ruled that the relevant provision of the ordinance is not covered by the wording of the Stock Exchange Act.

It does not appear to be conducive to the desired market transparency that persons should be freed from disclosure obligations despite being able to exercise voting rights in listed companies to a significant degree. There are now plans to incorporate the relevant reporting requirement in the Financial Market Infrastructure Act (FMIA). This is to be welcomed because it increases transparency regarding who is actually empowered to exercise voting rights.