The Swiss Stock Exchange and Securities Trading Act states that its provisions pertaining to public takeovers apply to securities in Swiss companies where at least part of such securities are listed in Switzerland.
In a recently completed friendly public takeover, the Federal Banking Commission held that the provisions of the Swiss Stock Exchange and Securities Trading Act pertaining to public takeovers should apply, notwithstanding the fact that the target company was a company incorporated in Luxembourg.
From the outset, the acquiring company had spontaneously resolved to comply with Swiss law on takeover offers so as to promote the goodwill attached to its name by affording investors all the protections provided by the law.
However, the Federal Banking Commission ruled that the offer was to be subject to Swiss law on a compulsory basis. As a result, the offer became subject to the supervision of the Swiss authorities.
This extension of the scope of the Swiss Stock Exchange and Securities Trading Act is consistent neither with the wording of the Act, which provides that it applies to securities in Swiss companies, nor with the "principle of incorporation" codified in article 154 of the Swiss Private International Law Act.
The Federal Banking Commission held in effect that the target company was a Swiss company because its operations were mainly carried out in Switzerland, thereby ignoring the principle of incorporation.
As other laws governing financial matters apply only where Swiss companies are involved, one wonders whether the Federal Banking Commission might also take an extensive view as to the application of these other laws.
Tavernier Tschanz was counsel to the acquiring company
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
