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The Revised Criminal Statute on Insider Dealing (Repeal of Article 161 (3) SPC)

February 2009

The revised criminal statute on insider dealing (Article 161 of the Swiss Penal Code, “SPC”) entered into force on 1 October 2008 against the backdrop of extensive efforts to amend criminal provisions regarding stock market offences. This provision prohibits the exploitation of knowledge of confidential facts that could have an influence on the market price. Prior to the enactment of the revised statute, the notion of facts which could have an influence on the market price had been the object of restrictive interpretation limited to three situations, specifically mentioned in the law. i.e. (i) the imminent issuance of new participation rights, (ii) the merger of companies and (iii) any similar fact of comparable importance. The deletion of article 161 (3) SPC has put an end to this limitation and therefore broadens the prohibition to exploit the knowledge of confidential facts to encompass any situation that could potentially impact the market price. This fundamental extension of the criminal statute’s scope will also induce changes concerning international cooperation in this field, as will be shown below. In practice, the implementation of the amendment will without doubt lead to difficulties. Courts in particular will have to deal with the difficult question as to how the notion of price-sensitive facts is to be understood in the absence of a legal definition.

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