The FATF measures and the end of bearer shares

In early November 2019, a law came into force that tightened FATF measures. This law means some dramatic changes for companies are to come: Among other things, Parliament decided to abolish bearer shares, and companies must react. Furthermore, violations of the reporting obligations under stock corporation law are now subject to penal sanctions.

Implementation of the FATF recommendations: Parliament abolishes bearer shares

With a clear majority, the federal councils decided to implement further recommendations made by the Financial Actions Task Force (FATF, also known as GAFI for “Group d’action financière”) in regards to money laundering and tax evasion. This means the abolishment of bearer shares. A violation of the FATF reporting obligations would result in a fine. Schärer Rechtsanwälte already anticipated this at the November 2018 client event and briefed clients on this subject. As we now know the specific statutory implementation of this ban, we have published an update.

Abolition of bearer shares

With the newly passed act, which came into force on 1 November 2019, Parliament has put together another set of measures that will lead to a number of radical changes. One of the most dramatic changes is the abolition of bearer shares. According to the new act, bearer shares are only permissible if the company has listed equity securities at a stock exchange or if the bearer shares are in the form of book-entry securities. If an exception is applicable, the company must, within 18 months of the new regulations coming into effect, request that the exceptional circumstances be entered into the trade register. If no exception applies, the company concerned must convert its bearer shares into registered shares within the aforementioned period of 18 months. Failure to comply with this obligation will result in the bearer shares being converted automatically.

This means that the abolition of bearer shares will require most companies to adapt their by-laws. Unless such adaptations have taken place, the Trade Register Office will refuse any application for registering another change of by-laws.

Penal sanctions

When implementing the FATF recommendations in 2015, Parliament did not consider a suspension of the participation rights to be a sufficient sanction for a violation of the reporting obligations. With the implementation of the 2019 FATF recommendations, the Swiss councils have now decided to introduce penal provisions: A violation of the obligation to report any economic beneficiaries of stock or shares can now result in a fine. A violation of a company’s obligation to keep stock/share registers is also punishable with a fine. For this purpose, two new articles – 327 and 327a – have been added to the Penal Code. This requires appropriate action from members of administrative boards and managers of joint-stock companies and LLCs.


We recommend companies with bearer shares that are not subject to the above-stated exceptions to convert their bearer shares into registered shares promptly and within the 18-month transition period in order to avoid time pressure. The notary publics of Schärer Rechtsanwälte will be happy to assist you.

In order to avoid criminal liability, members of administrative boards and managers should endeavour to comply with their FATF reporting duties in accordance with the law. Schärer Rechtsanwälte gladly offers help if you have any questions on the scope of the reporting obligations.