Beat Brändli

Financial benchmarks have become important reference points in the global financial market guiding worldwide obligations in financial contracts in the amount of hundreds of billions of US-Dollars. Since July 2012, after the attempted manipulation of Libor became known, the issues of credibility and representativeness of such widely used financial benchmarks are in the spotlight of the global community. An international reform process was initiated under the auspices of the G20, coordinated by the Financial Stability Board (FSB). This led in particular to the IOSCO Principles from 2013 to make financial benchmarks more solid. Additionally, after consultation of a market participants group, the FSB recommended to promote alternative (risk-free) reference points to the most important financial benchmarks, given that certain transactions are better suited to these alternatives. In Switzerland, already two alternative rates exist, namely the so called TOIS fixing and the SARON. The European Union is on the verge to adopt a wide regulation for financial benchmarks used in the Union addressing administrators but also contributors and users. The EU Regulation still allows Swiss administrators to be recognized in the EU, or their benchmarks to be endorsed respectively. On the long run an equivalence decision of the European Commission might be aimed for to get a more general market access.

Starting with an outline of the way in which Swiss Stock Exchange Law treats "shareholder groups", this paper analyzes the announcement effects of major shareholdings in the Swiss stock market as reported by the SIX Swiss Exchange database on "significant shareholders" in the time period from January 1, 2008 to December 31, 2010. This includes a total of 3,617 announcements. By applying specific selection criteria, a sample of 218 announcements was collected for use in the empirical analysis, covering 61 individual investors and 32 groups of investors acting in concert. We test the hypothesis that the disclosure notifications of major shareholders have a significant impact on equity pricing for the validity of its proposition. In particular, we test whether information related to groups acting in concert is priced differently from information related to individual investors. We analyze the (cumulative) abnormal returns occurring around official announcements to investigate these issues. Our empirical results reveal that the announcement effects of group-related disclosures are statistically and economically significant; the significance of the results strongly increases after January 2009 when the SIX Swiss Exchange launched a new electronic publication platform, thereby enabling a more immediate release of information. In the preceding sample period, the price effects are scattered over the days prior to the announcement date which makes it difficult to identify the effects. With the introduction of the new publication platform, the pre-announcement effects virtually disappear. Also, the difference between the stock price reactions between announcements related to single individuals and to groups is striking in the post-2009 sample. Furthermore, we find rather heterogeneous price patterns within both the "purchase" and the "sale" announcement categories. For example, the price effects of the "sale" sample are largely dominated by the valuation effects caused by the breakup (dissolutions) of controlling groups.

The engagement of a central counterparty (CCP) leads beyond doubt to an improvement of efficiency in the financial markets. The main function of a CCP is the elimination of the counterparty risk for the participating trading partners. In fact the counterparty risks of the traders are turned into a market risk for the central counterparty. Hence the transfer of risk causes a risk reduction for the trading partners but also implies a danger to the market in case a CCP should default. The subsequent review concludes that the legal framework in Switzerland seems to be sufficient to manage this threat and protect investors as well as the stability of the financial market adequately. However the evaluation of x-clear identified a potential risk in the links to other interoperating CCPs. While the regulators differ about how to handle the additional risk arising from links between CCPs the author emphasizes that a solution based only on an exchange of margins can harbour inherent peril, whereas the augmentation of its own default fund would confine a possible systemic contagion. Above all there is a need for transnational agreement on how to manage the additional risk.