On March 18, 1994, the Federal Assembly resolved the partial revision of the Federal Law on Banks and Savings Banks (Bank Law) of November 8, 1934. Based on this revision, the Federal Council amended the Banking Ordinance dating from May 17, 1972 on December 12, 1994. Both the partial revision of the Bank Law and of the Banking Ordinance came into effect on February 1, 1995 as did the guidelines of the Federal Banking Commission regarding the instructions for the presentation of annual accounts according to Art. 23 to 27 of the Banking Ordinance, which replace the previous guidelines in Appendix II of the Banking Ordinance.
The most important amendments can be summarised as follows:
Bank Law now only deals with banks. It no longer contains regulations for finance companies.
One new pre-condition for the issuing of a licence to engage in banking business is a minimum capital of Swiss Francs 10m (previously Swiss Francs 2m). Persons holding qualified participations in a bank (e.g., shareholders with at least 10% of the capital or the votes) must guarantee that their influence will have no negative impact on the business activities. Correspondingly, a duty to notify now exists for the establishment and the acquisition of qualified participations.
The definition of foreign control has been loosened. Among other things, only foreigners with qualified participations will be taken into consideration.
The revised Bank Law improves the supervision of the banks on a consolidated basis. Banks with domicile in Switzerland may transmit the necessary information and documentation required for supervision to their foreign parent companies under certain conditions (e.g. the maintenance of the Swiss banking secrecy).
Qualified participations of a bank outside the financial and insurance sectors may not exceed 15% of the bank's own means. Banks should mainly limit themselves to the financial sector.
The cantons can voluntarily delegate the supervision of their cantonal banks to the Federal Banking Commission. In addition, the cantonal banks are now under a duty to undergo an audit by an approved, external bank auditor.
Also foreseen is the possibility to grant international administrative legal assistance to foreign supervisory authorities; this as a precondition for the increasing amount of consolidated supervision taking place in the banking sector by the authorities of the country of domicile of the parent company of internationally-active bank groups. As a counter-move, the provision of administrative legal assistance is made dependent on conditions which ensure the avoidance of the improper use of the information transferred within the framework of this kind of legal assistance.
The regulations for the presentation of accounts contained within the Banking Ordinance have been comprehensively amended. This has been done with the aim of improving the information content of the annual accounts and the interim reports. In addition, the equity regulations have been completely revised.
On July 1, 1995 two additional amendments of the Bank Law entered into force:
In the framework of the General Agreement on Trade in Services (GATS) article 3bis of the Bank Law has been amended by stipulating that the granting of a banking licence is only subject to reciprocity as far as this condition is not in contradiction to international agreements. On the other hand, the banking licence can be granted dependent on sufficient consolidated supervision by foreign authorities.
A formal amendment of article 3ter Bank Law took place in order to bring this provision in line with the partial revision as per February 1, 1995.
As per January 1, 1997 the following articles of the Bank Law will be amended in connection with the revised Law on Collection Proceedings and Bankruptcy with the intent to ameliorate the protection of the creditors of the banks:
article 15 al 2 and 3: repealed
article 16: revised
article 22 al 2: repealed
article 23quater, al 3: repealed
article 37a: new
article 37b: new
article 53 al 1 lit a: revised
article 54: repealed
P. Herzog - KPMG Fides, Zurich
Amendments of the Swiss Federal Law on Banks and Savings Banks.
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