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The Sanction Commission of SIX Swiss Exchange Ltd has issued a reprimand against Bank Coop AG for having violated the provisions of the Directive on Ad hoc Publicity in connection with the publication of the company’s 2008 annual report as well as for violating the disclosure rules under the Corporate Governance Directive within its 2008 annual report.
The provisions of the Directive on Ad hoc Publicity obligate issuers to inform the market with regard to potentially price-sensitive facts. Financial figures are fundamentally deemed to constitute potentially price-sensitive facts. In January 2009, Bank Coop AG (Bank Coop) published an ad hoc notice with a multi-page presentation of its 2008 financial figures. The press release did not include information regarding the development of the net new money. The Sanction Commission concluded that this information is a potentially price-sensitive fact. Therefore a violation of the provisions regarding ad hoc publicity was established.
According to the Directive on Information relating to Corporate Governance, issuers must disclose in the annual report certain information about their corporate governance. Among other things, the Directive requires that the annual report contains precise information on the content and method of determining the compensation and shareholding programs for members of the board of directors and senior management. The Sanction Commission has ruled that Bank Coop, in its 2008 annual report, did not sufficiently disclose the criteria on which the amount of performance-dependent remuneration of board members and senior executives were based or, as it were, how the relevant criteria were weighted.
In considering this sanction, the Sanction Commission took into account the gravity of the breach, the degree of fault and the issuer’s sensitivity to a penalty.
SIX Exchange Regulation obligates issuers to inform the market of any potentially price-sensitive facts that have arisen in the issuer’s sphere of activity and are not yet known to the public, as per Art. 53 of the Listing Rules. Price-sensitive facts are facts that are capable of triggering a significant change in market prices. The related announcement is to be made in a way that ensures the equal treatment of all market participants. Such announcements must be truthful, comprehensible and complete.
Financial figures are fundamentally deemed to constitute potentially price-sensitive facts and must be published in accordance with the rules governing ad hoc publicity.
SIX Exchange Regulation’s Directive Corporate Governance (DCG) obligates issuers to publish key aspects regarding their top management, including the composition of the highest governing bodies, how they interact and how they are compensated, as well as the auditing body and the shareholders’ participation rights. This information helps investors to assess the properties of securities and the quality of issuers.
Information on ad hoc publicity can be found at:http://www.six-exchange-regulation.com/obligations/publicity_en.html
For more information on corporate governance, please visit:
http://www.six-exchange-regulation.com/obligations/governance_en.html
This sanction decision and previous sanctions pronounced in connection with ad hoc publicity and corporate governance can be found at:
http://www.six-exchange-regulation.com/enforcement/sanction_decisions_en.html
