Basel, 4 June 2004 - The Swiss Bankers Association (SBA) is promulgating new Allocation Directives for the New Issues Market in order to ensure that the allocation process is as fair and transparent as possible. The SBA is convinced that these directives represent an effective, practice-oriented solution that also stands up to international scrutiny. This self-regulatory measure on the part of the banks has been accepted by the Federal Banking Commission (FBC) as a binding minimal standard. The directives will enter into effect on 1 January 2005.

The Swiss Bankers Association (SBA) believes that the directives will improve the fairness and transparency of the allocation process for both the primary market (IPOs) and capital increases. The directives apply to all public issues and placements of shares, participation certificates and dividend-right certificates as well as convertible and warrant bonds in Switzerland. Their prime focus is on requirements relating to the objectivity and transparency of the allocation process. Urs P. Roth, CEO of the SBA, said: "Our overriding priority in drawing up these new directives was client protection. Once again, the Swiss banks have proved that their system of self-regulation enables them to draft efficient, practice-oriented and effective rules which are exemplary by international standards and will serve to further enhance the good reputation of Switzerland's financial centre."

The directives define rules of conduct for the allocation process, with special emphasis being placed on verifiability and transparency. The directives continue to allow for differences in the treatment of individual clients or client groups in line with the need to balance the relative claims of parties involved. Allocations based on promises of special reciprocal compensation (laddering, quid pro quo agreements and spinning) are explicitly forbidden. Furthermore, issue prospectuses must in future include additional information on any greenshoe options. Transparency is also required in respect of specific allocations requested by the issuer, for example to business partners or even employees (friends and family programmes). Finally, nostro allocations by the underwriting banks - particularly for market making purposes - are only permitted by arrangement with the issuer and on an appropriate scale. Once the transaction has been completed, the lead bank must disclose the placement volume together with the size of allocations to any subscriber categories having special connections to the issuer as well as any greenshoe options exercised.

The new rules have been accepted by the Federal Banking Commission as a binding supervisory minimal standard. This means that auditors recognised under regulatory law are required to monitor compliance with the directives on behalf of the FBC. The directives will enter into force on 1 January 2005.

PDF IPO directives

Contacts
Thomas Sutter	James Nason
Head of Communications Switzerland	Head of International Communications
Swiss Bankers Association, Basel	Swiss Bankers Association, Basel
Tel. +41 61 295 92 06	Tel. +41 61 295 92 15
Fax +41 61 272 53 82	Fax +41 61 272 53 82
www.swissbanking.org	www.swissbanking.org