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- With the entry into force of the Financial Market Infrastructure Act (FMIA) as at 1 January 2016, new provisions took effect concerning the duty to report voting rights. These provisions were fleshed out over the course of 2016 as a result of the Disclosure Office’s practice.
- Because certain affected parties stated that they had difficulties with the specific implementation of these duties, FINMA amended the relevant ordinance provision in the spring of 2017.
- The number of disclosure notifications increased significantly compared with the previous year, while the number of potential breaches only increased to a lesser extent.
Discretionary exercise of voting rights
The introduction of the duty to report voting rights (Art. 120 para. 3 FMIA) gave rise to various questions. For example, within the context of a recommendation the Disclosure Office had to determine whether certain contractual provisions result in a duty to report voting rights. The Disclosure Office concluded that, under certain circumstances, this is the case only after other conditions are met. Under other circumstances, however, the contract empowered the entitled party to exercise voting rights at its discretion directly upon its conclusion and the relevant duty to report in this case arises at the time of the conclusion of the contract.
Partial revision of FMIO-FINMA
The FINMA Financial Market Infrastructure Ordinance (FMIO-FINMA) contains detailed provisions about the duties with regard to reporting voting rights. Pursuant to the original version of the provision, with regard to legal entities the individual who controlled the relevant legal entity was considered to be entitled to exercise voting rights. This rule caused practical difficulties in the implementation for various affected parties. FINMA therefore proposed an amendment of the rule: The person who is actually able to make a discretionary decision concerning the exercise of voting rights is subject to the notification duty.
At the consultation hearing for FINMA’s amendment proposal, a vast majority of participants welcomed the change. Moreover, some participants felt it made sense to offer an alternative option for fulfilling the notification duty. The amended version of the provision has been in effect since 1 March 2017. The notification duty primarily applies to the person who can actually decide on the exercise of voting rights. The provision also allows for a choice: If the person who can decide on the voting rights on a discretionary basis is controlled, it is also permissible for the controlling person to meet the notification duty on a consolidated basis.
Significant increase in the number of disclosure notifications
Compared with the previous year, the number of disclosure notifications increased by approximately 25% to 1,587 (2016: 1,267). However, the number of potential breaches also increased, albeit not to the same degree as the number of disclosure notifications, i.e. by only around 17% from 70 to 82.
You will find the 2016 Annual Report of the Disclosure Office of SIX Swiss Exchange at the following link: https://www.six-exchange-regulation.com/en/shared/component/redirected/disclosure-annual-reports.html
Further information can also be found at: https://www.six-exchange- regulation.com/en/home/investor/obligations/disclosure-of-shareholdings.html
