Legal

The purpose of this Basic Information Notice (“BIN”) is to present the main principles of the Federal Act on Financial Services (FinSA).

1. General information: Objectives of the law

The Federal Act on Financial Services entered into force on January 1, 2020 and it aims to:

• strengthen the protection of investors;
• define rules of conduct regarding the offering of financial instruments and the provision of financial services
• create a level playing field among financial services providers.

2. Scope of application and identification of the financial services provider

The FinSA applies to all financial services providers (“FSPs”) operating in a professional capacity, which includes banks and issuers and suppliers of financial instruments in Switzerland. Most of FinSA’s provisions benefit from a transitional period until January 1, 2022.

In this context, CBH Compagnie Bancaire Helvétique SA (“CBH” or “the Bank”) is subject to the FinSA. The address of the Bank’s registered office is:

CBH Compagnie Bancaire Helvétique SA
Boulevard Emile-Jaques-Dalcroze 7
1204 Geneva
Switzerland

CBH is duly licensed as a bank and securities house and is subject to the supervision of the Swiss Financial Market Supervisory Authority (FINMA – Laupenstrasse 27, 3003 Bern). In addition, CBH is a member of the Swiss Bankers Association and the Swiss Deposit Guarantee Association for Banks and Securities Dealers.

CBH is an independent, family-owned private bank, and focuses on asset management for private and institutional Clients. CBH therefore offers wealth and asset management services as well as Family Office solutions.

The FinSA thus applies to CBH since it provides the following financial services:

• the purchase or sale of financial instruments,
• the receipt and transmission of orders for financial instruments,
• asset management,
• investment advice,
• granting credit for transactions in financial instruments.

3. Client classification

The FinSA requires regulated institutions to classify their Clients into one of the following three categories, which affects the level of protection and the information, control and documentation requirements: “private” Clients, “professional” Clients or “institutional” Clients.

[wptb id=11437]

Clients are automatically classified in one of these 3 categories of Clients, by legal obligation, but they can request a change of classification (Opting-in/ Opting-out, see next point 4):

[wptb id=11434]

4. Change in classification

The FinSA provides for the possibility to change category, upon written request by the Client, and provided that the required conditions are met.

4.1 Change to a more limited protection category (opting out)

A “private” Client may apply to be considered a “professional” Client in the following cases:

• The Client has (1) assets of at least CHF 500,000 and (2) the knowledge necessary to understand the risks of investments, thanks to personal training and professional experience or comparable experience in the financial sector

or

• The Client has assets of at least CHF 2 million.

Direct investments in real estate, social insurance claims and occupational pension assets are excluded from the above amounts.

The following Clients may apply to be considered as “institutional” Clients:

• Swiss or foreign collective investment schemes (or their management companies), not subject to prudential supervision;
• Companies, pension funds and other institutions serving occupational pension purposes, provided they have a professional treasury.

4.2 Change to a category offering broader protection (opting in)

• A “professional” Client may request to be treated as a “private” Client.
• An “institutional” Client may request to be treated as a “professional” Client.

5. Code of conduct

Rules of conduct are an important element of investor protection. For this reason, the FinSA obliges FSPs to comply with the obligations under supervisory law when providing financial services to “private” and “professional” Clients. These rules of conduct therefore do not apply to “institutional” Clients.

5.1 Obligation to inform

In order to meet this information obligation, the FSP shall, in particular, make available to their Clients (i) information concerning the FSP (e.g. via an information brochure detailing its name, address, field of activity, etc.) and (ii) information on the financial services that the FSP may provide.

All of this information regarding CBH can be found below, under points 7, 8 and 9. The Bank’s presentation brochure is available to Clients on demand. In addition, all relevant information are also available on the CBH website: under the heading “Legal”, accessible here.

In addition, the FSP informs its Clients about financial services, costs, products and risks. In particular, Clients are informed about (i) the financial service which is the subject of the personalized recommendation and the related risks and costs, (ii) the economic relations of the FSP with third parties with respect to the financial service concerned and (iii) the market offer taken into account for the selection of financial instruments by the FSP.

In addition, a Basic Information Sheet (“BIS”) on financial instruments such as investment funds and structured products is made available to “private” Clients when the acquisition of these instruments is not carried out within the framework of a discretionary management mandate. Thus, in the scope of personalized recommendations, the BIS enables Clients to obtain information on the characteristics, risks and costs of the financial instrument concerned, allowing for an easier comparison between the various financial instruments.

When the advice or recommendation is given in absentia, the BIS can be made available to Clients after the transaction has been concluded, provided that their approval has been obtained beforehand.

5.2 Appropriateness and adequacy of financial services

The obligation of the FSP to verify the appropriateness and suitability of the financial services offered to its Clients varies depending on the financial services offered to Clients:

[wptb id=11440]

If the appropriateness or suitability cannot be assessed due to insufficient information from the Client, the FSP will notify the Client before providing the financial service.

If the FSP assesses that a financial instrument is not appropriate or suitable for a Client, the FSP will advise the Client against it prior to the provision of the financial service.

In the case of multiple account holders or beneficial owners:

• the elements to assess the knowledge and experience normally relate to the account holders or beneficial owners of the relationship. In certain situations, other persons may be taken into account, such as a representative (at the Client’s request), or persons authorized by an operating company;
• the assessment of the suitability is always based on the overall situation of the account holders or beneficial owners of the relationship. Thus, in order to ensure the highest level of protection in accordance with the FinSA, the account holders/beneficial owners will be classified in the category that ensures the highest level of protection (e.g. a joint account opened by a “private” and a “professional” owner will be classified as a “private” Client).

5.3 Documentation and reporting

The obligation of documentation and reporting means that FSPs:

1. Document the following elements:

• the financial services agreed upon and provided to Clients, as well as the information provided by Clients on which the FSP relied to agree upon and provide the financial service;
• the fact that the FSP did not conduct any suitability or adequacy checks prior to providing the financial service;
• the Client’s needs and the underlying reasons for each recommendation, in case of investment advice

2. Transmit and report at the request of Clients:

• the financial services agreed upon and provided, as well as their costs
• the composition, valuation and evolution of the Clients’ portfolios
• the documentation relating to point 1.

5.4 Transparency and diligence in relation to Clients’ orders

The requirement for FSPs to be transparent and diligent with respect to Clients’ orders means that FSPs:

• uphold the principles of good faith and equal treatment;
• execute Clients’ orders in an optimal manner, ensuring the best possible result in terms of costs, speed and quality when executing Clients’ orders and taking into account the price of the financial instrument and the costs related to the execution of the order. However, for certain orders, financial instruments, markets or market conditions, other execution factors may be equally or more important than price in providing best execution;
• may borrow, as counterparty, the financial instruments from the Clients’ portfolios, or transmit such operations as agent, only with the Clients’ prior and express consent.

6. Mediation body

Client satisfaction is of utmost importance to CBH. Complaints may be sent to the Bank by mail at any time. They will be dealt with as quickly as possible and will help to improve the Bank’s services. Nevertheless, if CBH does not meet the expectations of its Clients, it remains fully available to them to find a concerted solution.

If, despite discussions with CBH, Clients find the proposed solutions unsatisfactory, they have the option of contacting the Swiss Banking Ombudsman:

Swiss Banking Ombudsman
Bahnhofplatz 9
P.O. Box
8021 Zurich
Switzerland

This neutral and inexpensive – or even free – mediation body will then examine the request for mediation and the situation in a fair and impartial manner.

Information on the mediation request process is available on the Ombudsman’s website and can be obtained from Relationship Managers.

7. Financial services information

As mentioned in point 2, the Bank offers wealth management, asset management and Family Office solutions. In particular:

• Asset management is based on an asset management mandate, whereby the Client entrusts the Bank with his/her assets to manage in accordance with in accordance with the Bank’s investment policy, the Client’s established risk profile and the risk profile of the selected portfolio. Under the asset management mandate, the Bank is the one to make the investment decisions. Transactions are executed without prior notice to the Client.
• Investment advice is provided by the Bank under an investment advice agreement. The Bank recommends one or more financial instruments to the Client, taking into account the Client’s entire portfolio, in accordance with the Client’s risk profile and the risk profile of the selected portfolio. In the context of investment advice, the investment decision, whether or not it follows the Bank’s recommendations, is the sole responsibility of the Client. The Bank declares that it does not provide investment advice relating to individual transactions without taking into account the Client’s entire portfolio.
• Execution-only means that the Client gives a buy or sell order and the Bank executes it. Services limited to the execution or transmission of orders are intended for investors who wish to retain complete autonomy and independence in the management of his/her assets or who have entrusted this management to an Independent Asset Manager (IAM). The Bank does not draw up an investor profile, provide the Client with investment advice, recommend the purchase or sale of securities or financial instruments or monitor portfolio performance. The Client has the necessary knowledge and experience to make his/her own investment decisions and is able to correctly assess the risks involved. The analysis of financial instruments and risks is therefore the sole responsibility of the Client or his IAM. The Bank does not verify the appropriateness or suitability of the transaction and will not subsequently remind the Client of this lack of verification.
• Granting of loans to carry out transactions in financial instruments (Lombard loan): the granting of a loan to carry out additional investments in financial instruments is considered a financial service subject to the rules of conduct of the FinSA.

As part of the provision of its financial services, the Bank informs its Clients of the related costs. The Client is informed of the costs and fees when the account is opened, by means of the Fees & Commissions brochure, and during the course of the business relationship, by means of any formal decision to apply a particular fee structure.

In addition, further information on the costs related to a financial instrument may be included in the Basic Information Sheet (BIS), or in the prospectus, if such documentation is available for the type of instrument concerned.

In all cases, the actual costs and fees related to the transactions are indicated on the transaction advice.

8. Custodian bank services for independent asset managers

The Bank provides custody services to Clients managed by Independent Asset Managers (IAM). In this configuration, the Clients concerned are in an “execution only” relationship with the Bank. In the cases provided for by law, it is the sole responsibility of the IAM to:

• Establish an investor risk profile of the Client;
• Ensure the adequacy and appropriateness of the advisory or management services;
• Provide the Client with the Basic Information Sheet and the prospectus required by law when offering financial products.

The management of the account and the resulting performance are the sole responsibility of the IAM.

9. General risks related to financial instruments

Trading and holding financial instruments offer opportunities and come with financial risks. Clients must understand the risks associated with the various instruments they wish to trade and use. To this end, the Bank provides its Clients with the SBA’s “Risks involved in Trading Financial Instruments” brochure.

This brochure is given to Clients when they open an account and is also available on the Swissbanking website. Clients can also request it from their Relationship Manager and ask any questions they may have.

10. Management of conflicts of interest

In order to accurately identify the risks of conflicts of interest with its Clients, the Bank takes into account the activities it carries out on its own behalf, the activities it carries out on behalf of one or more Clients, the interactions with third party service providers and the activities of its employees.

The situations described below, which is not an exhaustive list, may give rise to a conflict of interest when the Bank is acting on behalf of its Clients:

• recommendation of financial instruments in which the Bank holds a position;
• recommendation, on behalf of Clients, of financial instruments issued by the Bank;
• Nostro transactions;
• allocation of orders during global order placement;
• fixing the price of a transaction between two Clients of the Bank;
• third party incentives (retrocessions, financial advantages);
• transactions without economic interest.

The Bank could also find itself in a conflict of interest situation in the following cases:

• compensation of employees and of independent advisors/Independent Asset Managers (where permitted) based on performance;
• transactions by employees for their own account;
• incentives received by employees from third parties (gifts, invitations);
• private mandates by employees.

The Bank has put in place a series of organizational measures to avoid conflicts of interest that could arise in the provision of financial services and thus exclude any disadvantages that might result for Clients from such conflicts:

• Segregation of duties: the Bank undertakes to take appropriate measures to ensure that two departments (in the case of joint management) which could give rise to conflicts of interest are managed and directed by different managers.
• Chinese Walls: where necessary, the Bank restricts the flow of privileged information between different areas of activity or within a specific department by separating premises, staff, reporting lines, files and IT systems.
• Need to Know principle: the Bank ensures that employees only receive information that is necessary for the performance of their duties.
• Price Control for Transactions Between Two Clients of the Bank: the Bank has implemented controls to ensure that transactions between two Clients of the Bank are economically and price justified.
• Allocation of global orders: the Bank prohibits the processing of global orders without prior allocation of orders.
• Transparency of remuneration:
  • The “General Terms & Conditions and General Terms & Conditions for Deposits”, as well as the Bank’s various contractual documents, in particular the agreements relating asset management and advisory mandates, define the situations in which the Bank may receive commissions, retrocessions, or other types of remuneration received from third parties. The Bank ensures that the Client is informed of the scope of the remuneration received from third parties with whom the Bank has economic relations; such benefits or remuneration may be related to products held, delivered or purchased at the Clients’ request;
  • If Clients receive services from an independent financial advisor or from an independent asset manager, the Bank may pay a portion of the income from this relationship to the intermediary in question. It is the responsibility of the independent financial advisor or independent Asset manager to inform the Client of the compensation received.
• Employee Obligations: Bank employees are required to disclose any conflicts of interest, activities or investments that may affect their ability to provide financial services objectively and impartially. The Bank has also adopted internal directives aimed at treating all its Clients fairly and acting in their best interests. Training courses are organized for the Bank’s employees in order to make them aware of and/or remind them of the provisions relating to the identification and management of conflicts of interest.
• Prohibition of receiving advantages: the Bank has defined, in its internal regulations and directives, its policy on advantages received by its employees (e.g. gifts, invitations), in particular the prohibition for employees to grant or receive favors or other advantages exceeding social customs.

The Bank complies at all times with the principles of its policy on the prevention, management and mitigation of conflicts of interest.

If the organizational or administrative measures referred to above are not sufficient to ensure with reasonable certainty that the risks of damage to Clients’ interests are avoided, the Bank shall inform the Clients concerned before acting on their behalf. This information shall include sufficient details to enable the Clients concerned to make an informed decision with regard to the service in the context of which the conflict of interest arises.

11. Other mentions

This notice is intended exclusively for the Clients of CBH Compagnie Bancaire Helvétique SA.

The General Terms and Conditions, any other terms and conditions and any contract entered into with CBH, apply and remain in force.

Although every care has been taken in the preparation and review of this document, CBH does not accept any liability for the adequacy, reliability, completeness or accuracy of its contents, as some of the information provided in this document may have changed since it was given to Clients.

Definitions

Professional treasury: An entity has a professional treasury if, within or outside the entity, it entrusts, on a permanent basis, the management of its funds to a professionally qualified person with experience in the financial sector.

Large company: A large company is a company that exceeds two (2) of the following values:

• a balance sheet total of CHF 20 million (twenty million Swiss francs) or equivalent;
• a turnover of CHF 40 million (forty million Swiss francs) or equivalent
• an equity capital of CHF 2 million (two million Swiss francs) or equivalent.

Criteria set by the FinSA in case of Opting-out of the Private Client: The criteria are the wealth, the personal training and the professional experience of the Client (see below).

Assets: Assets include financial investments owned directly or indirectly by the Private Client, in particular (i) sight or term deposits with banks and securities firms, (ii) certificated and uncertificated securities (including securities, collective investment schemes and structured products), (iii) derivatives, (iv) precious metals, (v) life insurance policies with a surrender value. Direct investments in real estate, social insurance claims and pension fund assets are not considered financial investments.

Personal training: The personal training considered sufficient is related to the financial sector. In terms of the FinSA, the following personal training is deemed satisfactory:

• University degree in finance, economics or a related discipline (Bachelor’s level) or a specialized degree in economics or finance (Swiss CFA or equivalent); or,
• High school education (baccalaureate, high school diploma, business school or equivalent) and at least one year of professional experience in the financial sector; or,
• Professional training of at least three years in the financial sector.

Work experience: A person has work experience in the financial sector if he/she works, or has worked, for one of the following employers:

• a company active in the financial field (bank, insurance, asset manager, fiduciary, family office, etc.); or,
• a business not primarily engaged in finance but with a professional treasury (provided that the individual is or was employed in a responsible role in the professional treasury of such business); or
• a public corporation or pension fund with a professional treasury (provided the individual has or has had a responsible role in the professional treasury of such corporation or fund).

The length of experience required depends on the Client’s knowledge and varies from 1 to 5 years, depending on the level of training.

Comparable experience in the financial sector: A Client has comparable experience in the financial sector if, in each of the previous four quarters, he/she has carried out an average of 10 transactions on the financial markets (funds, shares, bonds, structured products, derivatives) for a value of at least 10,000 Swiss francs or equivalent per transaction.

Last update: December 2023