The Swiss securitisation market has developed steadily and successfully in recent years, attracting various issuers for both private and public transactions. Many of these issuers have become constant issuers on the Swiss market, which remains active and driven by the still low (or negative) interest environment. Specifically, recent notable activity has concerned auto-lease assets and credit cards, mortgage assets and the asset-backed security market environment.
The Federal Council recently adopted a new Digital Switzerland strategy for the next two years. The new strategy replaces the 2016 strategy and, like its predecessor, aims to prioritise the government's efforts in the digital realm. The new strategy places a stronger focus on initiatives relating to artificial intelligence and smart cities, smart villages and smart regions. It also addresses topics ranging from digitalisation in the transport and energy sectors to e-government and cyber risks.
The Swiss Parliament has approved the revised version of Tax Proposal 17, a proposal for corporate tax reform. The new proposal aims to set the basis for new rules on Swiss corporate tax (the last proposal having been rejected in a nationwide referendum) and secure and enhance Switzerland's overall attractiveness as a business location.
The Federal Office for National Economic Supply recently published the Minimum Standard for Improving ICT Resilience, together with a self-assessment tool. Compliance with this standard should allow organisations to successfully fend off cyberattacks and mitigate cyber-risks. The standard follows a similar structure to the US Department of Commerce's National Institute of Standards and Technology Cybersecurity Framework.
In a recent press release, the Federal Communications Commission (ComCom), jointly with the Federal Office of Communications (OfCom), launched the 5G radio frequency awards process. On behalf of ComCom, OfCom will auction several frequency spectrum blocs, which will be licenced for 15 years. These frequencies are important for the introduction of 5G technology in Switzerland and similar auction processes have already taken place or are under way in other jurisdictions.
The Council of States recently issued a revised version of Tax Proposal 17, a proposal for corporate tax reform. The new proposal is based on the government's March 2017 proposal and aims to set the basis for new rules on Swiss corporate tax (the last proposal having been rejected in a nationwide referendum in February 2017) and secure and enhance Switzerland's overall attractiveness as a business location. Under the proposal, Switzerland will repeal the existing special corporate tax regimes.
Switzerland and Brazil recently signed a double taxation agreement, which is a major achievement for both countries and has been a long-standing demand of the private sector. The new agreement will significantly increase Switzerland's attractiveness for Latin American investments and provide investors with legal certainty in tax matters.
A revised version of the federal Ordinance on Internet Domains recently entered into force. It gives the responsible registries the possibility of temporarily blocking the top-level domain names '.ch' and '.swiss' where they are being used for phishing or malware activities. In addition, anti-cybercrime services can request that registries block the domain names. However, these services require prior recognition from the Swiss Federal Office of Communications.
The government has adopted Tax Proposal 17, a new proposal for corporate tax reform. The purpose of this new proposal is to set the basis for new rules on Swiss corporate taxation and to secure and enhance Switzerland's overall attractiveness as a business location. Under Tax Proposal 17, Switzerland will repeal the existing special corporate tax regimes. As opposed to the proposal that was rejected in February 2017, the current proposal appears to have attracted wider political support.
Switzerland has become a major hub for initial coin offerings (ICOs). Yet to date, there has been little clarity about the resulting tax implications. Recent discussions and tax ruling negotiations with representatives of several tax authorities in Switzerland have provided more clarity on the tax implications of ICOs, at least regarding tokens issued by Swiss companies raising funds under the promise of a participation in future revenues.
The Federal Council recently announced that the revised Postal and Telecommunications Surveillance Act and its implementing ordinances will enter into force in March 2018. The revised act clarifies, strengthens and broadens the powers of the criminal prosecution authorities when it comes to communications surveillance. More specifically, it seeks to prevent situations where criminal suspects could avoid surveillance by using new technologies.
Switzerland is in the process of adopting legislation on electronic identification. The Federal Council published a preliminary draft e-ID Act and opened it for consultation by any interested actors. The Federal Council recently shared the consultation findings and commissioned the Federal Department of Justice and Police to prepare a revised draft act by Summer 2018.
The Federal Council recently issued a draft of the revised Federal Data Protection Act. This draft marks yet another decisive step towards the overhaul of the Swiss data protection landscape. The act's revision is an ongoing process intended to modernise Switzerland's data protection landscape and align it with revised EU legislation.
The government recently published a new detailed draft for a corporate tax reform. The purpose of this new draft is to set the basis for new rules on corporate tax (the last proposal having been rejected in a nationwide referendum) and to secure Switzerland's overall attractiveness as a business location. The draft includes several measures that have been discussed in the past, but it also addresses the criticism that contributed to the rejection in the February referendum.
The ongoing disruption of credit and capital markets is urging banks to pursue refinancing solutions that have rarely been used in the past or that have previously been used in a different context. A recent transaction shows that the mortgage bond system might become an efficient refinancing tool in situations where a secured refinancing transaction is difficult to structure or an off-balance sheet securitization is not possible.
The use of operating company ('opco') and property company ('propco') structures has recently become increasingly common in the Swiss lending and securitization market. Using these structures often leads to more efficient and less expensive financing. This update outlines some of the most significant features and issues related to setting up an opco/propco structure.
A provision of the Swiss Merger Act facilitates a transfer of assets from the originator to the securitization vehicle in a securitization transaction. Although some issues require clarification, the new transaction method will in most cases facilitate the transfer of a portfolio consisting of a large number of agreements, particularly with regard to the third-party consent required for such a transfer.
Switzerland has recently seen a major increase in both origination and securitization activity in the commercial real estate market. It is expected that this year will see another increase in commercial mortgage-backed securitization (CMBS) transactions, and that future multi-jurisdictional and pan-European deals including Swiss assets will be conducted.
The Swiss Federal Banking Commission is consulting on its Position Paper on the Applicability of the Investment Fund Law to Structured Products and Other Finance Vehicles. The paper asserts that structured finance products have evolved to the point that they have become publicly offered substitutes for regulated investment funds; therefore, they should be regulated as investment funds.