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New transparency and disclosure obligations for Swiss companies and shareholder

  • Switzerland

    01-07-2015

    On 1 July 2015, new regulations implementing revised FATF (Financial Action Task Force combating money laundering) recommendations will enter into force and affect Swiss companies and their shareholders. The new regulations include (i) a notification duty of companies for acquirers and holders of bearer shares, (ii) a notification duty of acquirers and holders of bearer shares and registered shares regarding the beneficial owners of such shares, and (iii) a duty of companies to maintain registers of holders of bearer shares and of beneficial owners. A breach of the new regulations may trigger significant consequences for shareholders and board members. The new regulations also apply for companies with limited liability (GmbH/Sàrl). 

    1. Notification duty of the acquirer of bearer shares

    Pursuant to the new rules, acquirers of bearer shares must notify within one month after the acquisition identification information to the company and provide evidence of the actual possession of the acquired shares. The notification duty also exists in case of changes to previously submitted information. Holders of bearer shares already before 1 July 2015 must notify the company until 31 December 2015. There is no notification duty if the shares are listed at a stock exchange or are issued as intermediated shares (Bucheffekten / titres intermédiés).

    2. Notification of the beneficial owner

    The acquirers of registered shares or of bearer shares which are not listed at a stock exchange must notify the company on the beneficial owner of the acquired shares once the acquirer controls 25% of the share capital or voting rights (alone or in cooperation with third parties). The notification to the company includes the name and the address of the beneficial owner who does not need to be identical with the acquirer. The beneficial owner is the natural person, for which the acquirer is ultimately acting.

    This regulation is likely to cause problems in practice, as in the case of an indirect acquisition (for example by subsidiaries) the natural persons which are shareholders of the parent company would need to be notified. These may not be known by the acquiring subsidiary. In particular in case of an indirect acquisition by a listed company it will be probably very difficult or even impossible to identify the beneficial owner.

    3. Duty of the companies to maintain registers

    Mirroring the duties on the shareholders’ side, the new regulations require the companies to maintain two new registers: the register of the holders of bearer shares (as the case may be), and the register of the beneficial owners. There are no explicit duties of the companies to investigate on the corresponding information. These registers need to contain names and addresses and, with regards to the register of bearer shares, in addition the nationality and the date of birth of the bearer shares holders. Such registers may in our view be combined and also merged with the existing share book.

    4. Assignment of the duties to a financial intermediary

    In order to protect confidentiality of bearer shares holders towards the company, notifications with regard to such holders may be directed to a financial intermediary if the shareholders meeting so resolves. The financial intermediary is to be appointed by the board of directors. In case of inquiries by the company, the financial intermediaries may limit the disclosure in a way that the identification of the holder is not possible (for example by solely disclosing the share numbers without shareholders’ names).

    Altogether there are four options for companies having bearer shares: (i) establishment of the register of holders of bearer shares, (ii) appointment of a financial intermediary, (iii) conversion of the bearer shares into registered shares (which is now possible without explicit basis in the articles of association), and (iv) conversion of the bearer shares into intermediated shares.

    5. Retention regulations

    The registers of the holders of bearer shares and of beneficial owners need to be maintained and stored so as to ensure that at least one registered representative of the company with domicile in Switzerland has access to the registers. The registers, including all documents evidencing entries, must be accessible within Switzerland at any time. The retention period is ten years after the deletion of an entry (or after deletion of the company from the Commercial Register). The financial intermediary may also be appointed to fulfil the retention obligations.

    6. Non-compliance with the new regulations

    Non-compliance with the new regulations may have significant consequences. The pecuniary and membership rights of shareholders who do not comply with the notification duties are suspended until the time of notification. In the absence of a notification within one month after the acquisition, or within the transition period until the end of 2015, the corresponding pecuniary rights are voided. As a result, dividends that are resolved in the meantime will not be paid out to the respective shareholders (and could be considered to be an unjustified payment with a right of the company to reclaim payment). Further, the concerned shareholders are not permitted to participate in shareholders meetings. The board of directors is obliged to ensure compliance with these rules, failing which directors may be exposed to potential liability claims.

     

     

    Disclaimer

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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