The issuing of covered bonds in Switzerland is governed by the:
Swiss Pfandbrief Act of 25 June 1930
Swiss Pfandbrief Ordinance of 23 January 1931
The 1930 Federal Pfandbrief Act provides a strict framework for the issuing of covered bonds in Switzerland. These bonds are used to provide long-term funding to finance the mortgage business of banks. The Swiss Pfandbrief® is a bond backed by special collateral.
The two-tier Swiss Pfandbrief system is globally unique. Under the legislation, individual banks are not permitted to issue covered bonds directly. The authorisation to issue Pfandbrief covered bonds is only granted to the two Pfandbrief institutes (Pfandbriefbank schweizerischer Hypothekarinstitute AG, Pfandbriefzentrale der schweizerischen Kantonalbanken AG). In this respect, the Swiss Pfandbrief® differs significantly from similar products, in particular covered bonds issued by individual banks under foreign law.
The trademark "Der Schweizer Pfandbrief®" has been legally protected since 2012 and the trademarks "La lettre de gage suisse®" and "The Swiss Pfandbrief®" have been protected since 2015.