SWITZERLAND Law and Practice Contributed by: Shelby R du Pasquier, Patrick Hünerwadel, Valérie Menoud and Marcel Tranchet, Lenz & Staehelin
While sustainability-linked lending is more common among publicly listed companies, it is also present in transactions with privately held companies. That said, over the past year, the growth of sustainability-linked features has slowed somewhat. No uniform approach has yet developed but market practice is becoming increasingly standardised, espe- cially in terms of: • the relevant triggers (key performance indicators are the most common triggers); • reporting; and • the implications (eg, margin increase/decrease). To date, these efforts largely rely on voluntary stand- ards, such as the Loan Market Association recom- mendations for the bank debt market or the Interna- tional Capital Market Association principles for the debt capital market. This development ties in with greater regulatory efforts to better assess how issuers take ESG aspects into account. In this context, it is worth noting that the Swiss stock exchange (SIX Swiss Exchange) has launched ESG indices – based on data from the Swiss sustainability rating agency Inrate – for its equity and bond markets. Furthermore, Swiss sustainability reporting rules require large Swiss companies and regulated finan- cial institutions to publish a non-financial report on an annual basis. This report focuses on information related to the company’s business development, performance, position, and impact on environmen- tal (including climate-related disclosures, for the first time in 2025, covering the financial year 2024), social, employee, human rights and anti-corruption matters. 2. Authorisation 2.1 Providing Financing to a Company Lending activities are generally unregulated in Swit- zerland, provided the lender does not accept depos- its from the public or refinance itself via a number of banks. A Swiss-based entity that combines lending activities with deposit-taking from the public or refi-
nancing from a number of banks will generally qualify as a bank, which triggers licensing requirements under Swiss banking laws. The Swiss regime for the cross-border provision of financial services, including lending to Swiss borrow- ers, remains rather liberal. Foreign-regulated entities operating on a strict cross-border basis (without hav- ing a business presence in Switzerland) do not need to be authorised by FINMA, as a general rule. If, however, these activities involve a physical presence (such as personnel or physical infrastructure) in Switzerland on a permanent basis, the cross-border exemption is generally not available. In practice, FINMA considers a foreign entity to have a Swiss presence as soon as employees are hired in Switzerland. That said, FINMA may also look at further criteria to determine whether a foreign bank has a Swiss presence, such as the busi- ness volume of that bank in Switzerland or the use of teams specifically targeting the Swiss market. That being said, the Swiss Financial Services Act (Fin- SA) imposes certain conduct, organisational and reg- istration requirements on financial service providers that provide financial services (eg, granting of loans to finance transactions with financial instruments) on a professional basis in Switzerland or to clients based in Switzerland (similar to the EU’s MiFID II). Certain exemptions are available for regulated financial insti- tutions targeting exclusively institutional and profes- sional clients in Switzerland. Lending to individuals for purposes other than busi- ness or commercial activities (ie, consumer credit) is regulated by the Swiss Consumer Credit Act (SCCA). Lenders contemplating consumer credit activities fall- ing under the SCCA on a commercial basis must reg- ister with the canton in which they are established, and the canton(s) in which they intend to operate. Exemp- tions from this registration requirement are available for Swiss-licensed banks and for lending services that finance the acquisition of goods or services provided by the lender itself.
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