Chapter 7. The Intermediated System in Switzerland

Abstract

While Swiss civil law has both Romanic and Germanic legal traditions, the law of securities belongs to the Germanic legal tradition. Under the strong influence of von Savigny’s materialisation theory, as in Germany, securities (Wertpapiere) are not mere shares or bonds, but share certificates and bond certificates embodying such equity, debt or other private rights with value. Unlike Germany, however, the Swiss Code of Obligations (“SCO”) expressly provides the definition of securities, similar to the German common view regarding securities, initially defined by Heinrich Brunners. Article 965 of SCO specifies that a securities certificate (Wertpapier) is any certificate with which a right is combined in such a way that without the certificate, the right may neither be exercised nor transferred to another. As in Germany, securities, i.e. rights incorporated in securities certificates, are transferred by delivering the possession of securities certificates (Arts. 967 & 969 of SCO). Meanwhile, although Swiss Civil Code (“SCC”) does not have a clause defining a thing (Sache), objects of ownership regarding movables (Fahrniseigentum) are tangible things and natural forces that may be subject to legal control (Art. 713 of SCC), and it is understood that corporeality (Korperlichkeit) is the central element in the definition of things. As in Germany, transfer of movables is required to deliver possession of the movables to the transferee (Art. 714 of SCC). As a result, Switzerland also employs a medium of papers to apply the rules of property law to securities and their transfers, treating the papers as tangible things.