When Swiss regulator Finma made the decision to bail in holders of Credit Suisse’s AT1 notes as part of the forced merger with UBS, the aftershocks of that decision were always going to be felt acutely across Asia. These types of bank capital instruments have proved more popular among investors in the region than almost anywhere else.
Now, legal cases against this decision are being brought on the basis of administrative law claims, as well as bilateral and multilateral investment treaties signed between Switzerland and countries such as the Philippines, Thailand, Japan, Singapore, Vietnam and Hong Kong. Investors are claiming that the wipe-out of their AT1 holdings is a violation of these treaties.
One group of bondholders filed an administrative law claim in May against Finma. Another contingent is focusing on remedies arising from the free trade agreement between Singapore and Switzerland. Lawyers say that for most of the treaty claims, the firms must undertake a six-month negotiation with the Swiss government, after which they can file papers to start investment treaty arbitration.
Just the Tonik
Tonik claims to besoutheast Asia’s first neobank.