General
There is a strong perception that duties of information and consultation arise from contract law (Article 394 – 406h OR (Swiss Code of Obligations), whereby the individual duties are to be determined on the basis of the specific circumstances of each individual case. The Federal Supreme Court gave an almost exemplary description of the duties of asset managers in its ruling BGE 115 II 62.
The provisions for the commission contract as defined by Article 425 OR are authoritative in the case of so-called “execution only” transactions.
In matters of fidelity liability, the principle of good faith in accordance with Article 2 of the Swiss Civil Code must also be observed.
Specific regulations
Acts and ordinances
The most important acts and ordinances in the field of investment protection are:
- Financial Market Supervision Act (FINMAG)
- Swiss Banking Act and Ordinances
- Stock Exchange Act and Ordinances
- Collective Capital Investment Act and Ordinances
- Anti-Money Laundering Ordinance of the Swiss Federal Banking Commission
Duty of authorisation
Banks and financial intermediaries are subject to duty of authorisation. In this connection, stockbrokers, bond houses, asset managers, distributors of collective investment schemes, insurance brokers and directly subjected financial intermediaries (DSFI) as defined by the Anti-Money Laundering Act are classified as financial intermediaries. Foreign stockbrokers who continuously employ personnel on a commercial basis in Switzerland are also subject to duty of authorisation by the Swiss Federal Banking Commission.
Once authorised, banks and financial intermediaries are subject to ongoing supervision. In this regard, information should be obtained on the continuous observance of authorisation requirements and further legal and regulatory provisions.
Commentary
The authorisation requirements for stockbrokers are:
- A suitable operating organisation (Article 10 clause 2 letter a and clause 3 of the BEHG)
- Minimum paid-up capital and collateral security (Article 10 clause 2 letters c and d BEHG, Article 23 BEHV)
- The persons entrusted with top management, supervision, control and the management of the business in addition to the controlling shareholders must have appropriate specialist knowledge.
The rules of conduct for stockbrokers are derived from Article 11 BEHG and have priority over the contract wherever they represent a stricter standard.
Collective capital investment schemes
The Federal Act on Collective Capital Investments (KAG) regulates the protection of investors in relation to collective capital investments such as investment funds. All persons who manage or hold collective capital investments are subject to duty of authorisation.
According to Article 7 clause 1 KAG, collective capital investment schemes are assets which investors put forward for collective capital investment and which are managed for their account. The investment needs of the investors are satisfied in a uniform manner (among the multiple participants).
The rules of conduct with regard to duties of disclosure in the field of collective capital investment are derived from Article 20 et seq. KAG and have priority over the contract wherever they represent a stricter standard.
