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The SWX Swiss Exchange (SWX) is adopting new Rules of Procedure as of 1 January 2007. Compared with the current situation, the new Rules mean considerable changes and benefits for issuers, participants and traders. The key points include an improved system of checks and balances, greater legal certainty, standard rules of procedure governing investigative and sanction proceedings and the faster completion of these proceedings.
The new Rules of Procedure represent a milestone in the history of self-regulation at the SWX. For issuers, participants and traders they mean considerable changes and improvements to stock exchange laws of procedure. The Admission Board retains its legislative authority as before, but cedes its present judicial powers to the newly created Sanction Commission. This improves the separation of powers. Furthermore, procedural rules applicable to all areas of supervision will ensure that proceedings are conducted in a standard way. The reorganization of judicial powers and the introduction of a series of other, selected changes should also make for the swifter completion of sanction proceedings.
The most important changes in detail
Improved separation of powers – the Sanction Commission replaces the Disciplinary Commission
The monitoring of compliance with the conditions for listing, and the initiation of any proceedings against issuers will be handled by the Admission Division. Surveillance & Enforcement will retain its present responsibility for supervising participants and traders. The Admission Board will waive its current judicial powers; these will now be exercised by an independent Sanction Commission, which will replace the existing Disciplinary Commission. The Sanction Commission is to be expanded to comprise seven members: The Chairman and half of the members will be elected by the Admission Board, with the remaining members appointed by the Board of Directors of the SWX.
The members of the Sanction Commission and investigative authorities are subject to strict rules on recusal. The executive bodies will act and decide independently within the scope of their competence.
As of 1 January 2007, the Sanction Commission will comprise the following members:- Dr. Jürg Spring, Chairman, President of the Administrative Court of Canton Thurgau
- Bruno Allmendinger, CFO and Member of the Executive Committee, Sulzer Ltd., Winterthur
- Jean Berthoud, Managing Partner, CEO, Banque Bonhôte & Cie SA., Neuchâtel
- Sylvain Matthey, Manager, Pictet & Cie, Geneva
- Henry Peter, Professor of Economic Law, University of Geneva, Lawyer in Lugano
- Isabelle Romy, Professor at the Faculty of Law, University of Fribourg, Lawyer in Zurich
- David Schnell, member of variuos Boards of Directors, amongst others of Kuoni Travel Holding Ltd. and SIG Holding Ltd.
Accelerated conclusion of proceedings
The new Rules of Procedure will mean that proceedings are concluded more rapidly for participants, traders and issuers. This innovation will accommodate the capital market’s demand for prompt information.
The SWX investigative bodies will now submit their proposals directly to the Sanction Commission, which will take a decision in its capacity as a court of first instance. The referral procedure is thus shortened and proceedings speeded up accordingly.
The Rules of Procedure also provide the investigative bodies with new instruments with which to conclude proceedings more rapidly. For example, the investigative bodies may issue sanction notices in certain cases where there has been a breach of the General Conditions or the Listing Rules. The parties concerned may appeal against such notices to the Sanction Commission. In the future, investigative bodies will also be able to conclude proceedings on the basis of agreements with the parties concerned. These agreements are permissible in trivial cases or where they would allow the public to be informed more rapidly or more fully than would be the case with sanction proceedings concluded in the proper manner.
Introduction of new principles for proceedings and greater legal certainty
The streamlining of procedures for sanction proceedings and the abrogation of recess respond to calls for proceedings to be handled swiftly. The new statute of limitations provisions will also help to speed up the conclusion of proceedings. No proceedings will be instituted if a possible breach of the SWX rules and regulations happened more than two years ago. Similarly, a decision may no longer be taken if more than two years have passed since proceedings began. These statute of limitations provisions also increase legal certainty. New publication practices additionally help to improve this aspect of the sanction system.
New communication practices
Sanction notices issued by the investigating bodies will generally be published. As has been the case to date with the decisions of the Admission Board and Disciplinary Commission, the beginning of an investigation and its outcome – stating the name of the issuer – will be communicated in the form of a media release. In the event of investigations into financial reporting, in line with current practice only legally enforceable sanction rulings will be communicated; the initiation of investigations will not be published, however. The initiation or conclusion of preliminary investigations will no longer be announced. The full decisions of the Sanction Commission will as hitherto and as a general rule be published in anonymised form. The standardization of communication practices accommodates the capital market's greater need for transparency with regard to judicial decisions, equal treatment and legal certainty.
Transitional regulation
The new Rules of Procedure enter into force on 1 January 2007. The new Rules do not apply to proceedings for which investigations commenced prior to 1 January 2007, however. The full text of the Rules of Procedure can be accessed via the Internet at: http://www.swx.com/download/admission/regulation/rules/rules_of_procedure_en.pdf
