I. Purpose and Right of Issue

¹ The purpose of the pledging stations is to provide property owners with long-term, guaranteed real estate loans at such a stable and reduced rate.

² The right to issue letters of pledge belongs to two power stations, one of which is made up by the cantonal banks and the other by the other credit institutions. Both plants have the right to merge.

II. Authorization

¹ The right to issue letters of pledge can only be exercised with the permission of the Federal Council.

² In order to obtain this authorisation, the plant is required to form an anonymous company or a cooperative company; to be composed of at least 5 members; to have a foundation capital on which at least 5 million francs are already paid; To have its statutes approved by the Federal Council.

III. Cantonal Bank Central

Any cantonal bank, within the meaning of Art. 3, para. 4, of the Federal Act of 8 November 1934 on banks and savings banks ² , has the right to be a member of the issuing station of the cantonal banks' pledge letters.

IV. Other Credit Institutions Central

¹ Has the right to be a member of the central bank of other banks any credit institution which has its principal place of business in Switzerland and whose assets, according to the last balance sheet established and published in accordance with the requirements of the Federal Council, shall be composed for More than 60 per cent of claims acquired in land credit operations in Switzerland.

² The following are considered to be debts acquired in land credit operations carried out in Switzerland: investments in mortgages on immovable property situated in Switzerland and bonds issued in Switzerland, as well as loans of fixed sums, Fixed or denunciation deadlines at least three months, the guarantee of which consists solely of mortgage securities and pledge letters issued in Switzerland.

³ This plant is free to admit as members of other credit institutions whose head office is located in Switzerland.

⁴ Moreover, the conditions of admission are laid down in the statutes of the plant.

Sphere of activity

The sphere of activity of the plants includes:

1.

Issuing pledge letters;

2.

The product placement of this program

A.

In loans granted in accordance with ss. 11 and 12,

B.

In letters of rent, up to a maximum of one tenth of that product;

3. ²

The placement of their own capital and third-party funds in secured claims up to two-thirds of the venal value and for the letters of pension of two-thirds of the income of the land pledge in Switzerland, in pensionable effect By the National Bank and in debt securities of domestic debtors negotiated on a representative market, in view or in term deposits either with their members or with other Swiss banks, as well as in land for installation Clean commercial premises;

4.

Other short-term bank operations, but only to the extent required by the issuance of pledge letters and the granting of loans.

VI. Tax Exemption

¹ The plants are exempt from the direct taxes of the Confederation, the cantons and the municipalities; the exemption does not extend to the direct taxes of the cantons and municipalities on land ownership.

² Loans made by plants in accordance with Art. 11 and 12, as well as the interest they produce are not subject to any federal stamp tax.

I. Letters of pledge

A. Form

¹ The pledge letters can be issued in the form of securities, global certificates, or value-values. They are nominative or bearer.

² Letters of pledge may also be issued in the form of written loan agreements.

³ When issuing nominative pledging letters, the plant maintains a register where the name and address of the owners and the usufructuaries are registered. This register is not public.

⁴ Registration in the Register shall take place only in the light of a coin establishing the acquisition of the letter of pledge in ownership or the establishment of a usufruct.

⁵ In the relations with the plant, is the only one legitimized that which is for the benefit of an entry in the register.

B. Contents

The Federal Council may make provisions concerning the content of letters of pledge.

C. Attestation of legal coverage

The responsible bodies testify before the issue of the letters of pledge that the legal cover exists.

D. Amount of issue

Plants are required to limit the issuance of pledge letters so that the total of their pledges, including pledge letters, is not more than 50 times their own capital.

II. Loans

A. Conditions

¹ The plants shall give their members, on the product of the issue, loans whose coverage is fixed in accordance with Art. 19.

² They may also provide loans to other credit institutions, the coverage of which is set out in s. 26.

B. Deadline and early repayment

¹ The maturity of the loans must coincide with that of the letters of pledge used to make the loans.

² These may be repaid in advance of their maturity on the condition that the debtor institution gives in payment at the plant, for an equal amount, letters of pledge of the same nature as those whose proceeds were used to make the loans and That it pays at the same time the costs of issuance not yet covered by these pledge letters.

III. Obligation to Mortgage Debtors

The members of the power stations and the other credit institutions to which the latter grant loans shall be obliged to make as much benefit as possible to their mortgage debtors as a result of the issuance of pledge letters.

I. Coverage of letters of pledge with power stations

A. In general

The letters of pledge and interest not yet paid must be covered at all times with the plants by loans granted under s. 11 and 12. The share reserved for art. 5, c. 2, must be covered by letters of rent; these titles are kept and managed by the plants.

B. Increase in coverage

Where the interests of the cover are lower than those of the pledge letters, the coverage must be increased in proportion.

C. Central Register of Companies

¹ Power stations are required to enter into the register of guarantees the cover of the letters of pledge found in their possession.

² The Federal Council will make the necessary arrangements.

D. Management of coverage

¹ Plants are required to retain separately from their other assets the cover recorded in the register of wages.

² They have an obligation, in the interests of the creditors of pledge letters, to assert in their own name all the rights deriving from that cover.

E. Permission to pledge letters of pledge

The pledge letters shall enjoy, both for the capital and the interest not yet paid, a lien on the cover entered in the register of guarantees of the plants without the need to conclude a special contract for pledging and Provide coverage to creditors of the pledge letters or their representatives.

II. Coverage of loans to members kept by the members

A. In general

¹ Loans made by power stations to their members and interest not yet paid must be covered at all times by members' claims against their debtors. These claims must be secured by real estate or by pledging and are kept and managed by the members.

² The immovable property of such claims must be located in Switzerland and the object of the collateral must consist of Swiss mortgage loans or letters of pledge.

B. Increase in coverage

Where the interests of the coverage provided by a member are lower than those of the loan granted by the plant, the coverage shall be increased in proportion.

C. Register of members' salaries

¹ Members are required to enter into a register of guarantees the coverage of the loans received in their hands.

² The Federal Council will make the necessary arrangements.

D. Management of coverage

¹ Members are required to retain separately from their other assets the coverage of the loans received in their register of wages.

² They have an obligation, in the interest of the plant, to assert in their own name all the rights deriving from that cover.

E. Right to pledge loans

The loans made by the plants and the interest not yet paid shall have a lien on the cover entered in the register of wages of the members without the need to conclude a special contract for pledging. To power stations or their representatives or to register in the land registry.

F. Accountability

¹ Each year, on a fixed date, and each time the plant requires it, the debtor member of a loan is required to present the management account of the cover that is in his/her hands.

² He shall not receive compensation for such management or for the establishment of the account.

III. Additional Coverage

¹ If the cover no longer reaches the prescribed amount and the difference cannot be immediately filled, the coverage will be completed either in cash or by publicly traded bonds of the Confederation, the cantons or the municipalities. In this case, the bonds must be taxed at 95 percent of the day's price.

² Art. 14 to 23 apply to the supplementary coverage.

IV. Loans to Non-Affiliated Institutions

¹ Credit institutions that, without being members of a plant, wish to obtain loans, are required to pledge, at the plant, under s. 899 to 901 of the Swiss Civil Code ¹ , mortgage claims or complement values that may form the cover of pledge letters and represent at least 105 per cent of the loans granted.

² The plant will also record the cover values that have been given to the plant.

Nature of the prosecution

The prosecution of credit facilities for holders of pledge letters, as well as the continuation of power stations against members constituted in public limited liability companies or cooperative corporations for credit claims arising from loans made by the power stations Can only take place through bankruptcy. It is reserved for the protection of creditors of pledge letters and loans in accordance with Art. 42.

II. ...

III. Rank of claims

Regardless of the date on which they are issued, all letters of pledge from a plant are guaranteed to the same rank by the cover.

IV. Community of Creditors

The requirements relating to the community of creditors in bond borrowings apply to creditors of pledge letters. In this case, the owners of debt whose interest rate is the same and the repayment terms are identical form a community of creditors.

V. Credits Filed by Non-Affiliated Institutions

When a loan has been made pursuant to s. 26, the plant may, if the obligations are not fulfilled on time by the debtor and that the summons has remained unsuccessful, make the best of the pledged values and draw from the proceeds of the sale the sum which it amounts to.

I. Requirements for estimates

¹ The power stations shall, in accordance with the following provisions and taking into account the official estimates of the cantons, make provisions on how to determine as accurately as possible the value of the encumbered assets of a Mortgage to be used as a cover. These requirements are subject to approval by the Federal Council.

² The Federal Financial Market Supervisory Authority (FINMA) may require a new estimate of land when the value of money or economic conditions have changed dramatically. ¹

II. Basis of Estimate

¹ In estimating the commercial value of a building, only its permanent qualities must be considered.

² Where a building is used for primarily agricultural or forestry operations, the estimate should be based on the average yield.

III. Loan Limits

A. Maxima

Are accepted as cover for letters of pledge or loans, subject to mortgages in the preferable order guaranteeing capital and interest:

1.

Mortgage claims on real property that are used primarily in a farm or forestry operation, up to a maximum of five sixths at most of the value of return, as long as it has been established, but never to exceed Two-thirds of the venal value;

2.

Mortgage claims on other buildings up to two-thirds of the value of the property.

B. Reductions

For building land, industrial establishments and other buildings whose performance has a similar character, the requirements to be laid down in accordance with Art. 32 will set proportionally lower loan limits and will contain provisions to prevent the impairment of the pledge.

C. Improper claims for coverage

Claims on buildings whose value is reduced by normal operations, such as mines and quarries, are not allowed as cover for letters of pledge or loans.

I. Mortgage Debtor Representative

The Federal Council has the right to appoint a representative of mortgage debtors as a member of the board of directors or steering committee of each plant.

II. Balance sheet requirements

The Federal Council shall prescribe the form in which the annual balance sheets and the profit and loss accounts, as well as the balance sheets of the plants shall be established and published, the special indications which they shall contain and the Details of the transactions on which the management report is to be explained.

III. Control of pledging stations

¹ The pledging stations shall load an audit firm approved by the Federal Supervisory Authority for review in accordance with Art. 9 A , para. 1, of the Act of 16 December 2005 on the supervision of the revision ² To conduct an audit in accordance with Art. 24 of the Act of 22 June 2007 on the Supervision of Financial Markets ³ .

² The pledging stations shall have their annual accounts and, where applicable, their group accounts reviewed by a revision undertaking subject to the supervision of the State in accordance with the principles of the ordinary control of the code of Obligations ⁴ .

IV. Control of members

¹ The audit companies of the members of the power stations shall examine, as part of their annual audit, the register of guarantees and the cover of loans.

² They shall record the results of their audit in a report to the central and audit companies mandated by the latter.

Monitoring

Art. 33-35 and 37 of the Act of 22 June 2007 on the supervision of financial markets ² Are not applicable.

VI. Return of Coverage Values

¹ FINMA may order the remission of the coverage values when a plant or member who has obtained a loan violates the requirements in a serious and repeated manner or seriously compromises the confidence that is placed on it.

² FINMA may entrust the management of the hedging values to an investigating officer, at the cost of the plant or member concerned, until the situation is restored.

VII. Withdrawal of authorization ²

If a power station repeatedly objects to the measures ordered by the supervisory authority, FINMA ³ May propose to the Federal Council that it withdraw the authorisation to issue letters of pledge.

VIII. Application of provisions on bank insolvency

Art. 25 to 37 G Of the Act of 8 November 1934 on banks ² Are applicable by analogy.

I. Civil liability

A person who contravenes this Act or the Enforcement Order is liable to the creditors for the letters of pledge or the loans of the damage caused.

II. Offences

A. Contraventions

1. The person who, without being duly authorized, issues obligations under the name of letters of pledge,

The person who issues letters of pledge or receives loans that he or she knows the coverage is insufficient or lacking,

Is, if the Penal Code ² Does not provide for a more severe penalty, punishing the fine up to a maximum of 50 000 francs. ³

2. Where the author has acted negligently, the penalty shall be the fine up to a maximum of 30 000 francs.

B. Non-compliance with order requirements

¹ Whoever, intentionally or negligently,

A.

Issues letters of pledge of an amount in excess of the amount authorized under s. 10,

B.

Does not comply with the requirements for the keeping of the register of wages, the separate conservation of the cover or the establishment of the balance sheet and profit and loss accounts,

C.

Hinders or prevents the regulatory performance of an accounting revision or other official control,

Be punished with a fine of up to 5,000 francs.

² In the case of an offence within the meaning of para. 1, let. C, criminal prosecution in accordance with art. 285 of the Swiss Penal Code ² Is reserved.

I. ..

II. Letters of pledge of cantonal law

This Law shall have no effect on the letters of pledge of cantonal law issued before its promulgation.

III. Entry into force

¹ The Federal Council shall fix the date of entry into force of this Law.

² Upon the coming into force of the Act, s. 916 to 918 of the Swiss Civil Code. ¹ ... ²