Revision of the Swiss Banking Act – Consultation initiated
On 8 March 2019 the consultation on the partial revision of the banking act was initiated by the Federal Council. The amendments have an impact on bank restructurings, deposit insurance and intermediated securities. The consultation period will close on 14 June 2019.
Insolvency and restructuring measures
The Swiss Banking Act (Bankengesetz) contains general rules on the insolvency and bankruptcy of banks. The more detailed provisions are included in the FINMA Banking Insolvency Ordinance (Bankeninsolvenzverordnung). This was more than once criticised since the level of ordinances may not provide a sufficient legal basis. In order to strengthen legal certainty several amendments to the Swiss Banking Act are proposed. In particular regulations regarding the insolvency of banks and provisions that may affect legal positions or interfere with the rights of third parties have been moved from the ordinance to the Swiss Banking Act. This concerns amongst others claims of the bank’s owners and creditors in the course of a bank restructuring process and provisions regarding the restructuring plan. In addition, an adjustment to the Swiss Mortgage Bond Act (Pfandbriefgesetz) has been proposed. This amendment will strengthen the functioning and stability of the Swiss mortgage bond system in the event of insolvency or bankruptcy of a member bank.
Regulations with respect to the deposit insurance have been adapted to international standards. Particular attention is given to the reduction of deadlines. On the one hand, the deadline with regard to the payment of the funds from the deposit insurance to the bankruptcy liquidator has been reduced and on the other hand the deadline for forwarding the funds to the depositors has been shortened. In addition, under certain circumstances banks will have to deposit securities or Swiss francs in cash with a custodian.
The intermediated securities act (Bucheffektengesetz) will be amended to ensure that all custodians are obliged to separate their own portfolios from the ones of the clients.
JudithRaijmakersAttorney at law Partner
Judith Raijmakers, attorney at law, is a partner in our Zurich and Luxembourg offices. She focusses on finance transactions including acquisition financing, asset financing, real estate and transportation financing, debt (re)structuring and debt issuances.T: +41 43 434 67 24 M: +41 79 870 91 03 E: email@example.com