Commentaries

In a recent ruling, the Swiss Federal Supreme Court upheld an insurance company's refusal to cover losses of more than 35 million dollars suffered by a Swiss bank forced to compensate unhappy investors at the end of legal proceedings in Dubai (ruling 4A_440/2022 of 16 November 2023). A bank established in Switzerland has a subsidiary in Dubai, company E. The subsidiary is subject to supervision by the Dubai Financial Services Authority (DFSA) and is authorised to provide certain financial services,[...]

At its meeting on 31 January 2024, the Federal Council adopted the amendments to the CISO and decided that the amendments to the CISA relating to the limited qualified investor fund (L-QIF), adopted on 17 December 2021, would enter into force. As a reminder, the L-QIF is a collective investment reserved for qualified investors within the meaning of the CISA that is not subject to approval or authorisation by FINMA (art. 118a CISA). It may take the form of a[...]

In its decision 4A_350/2023 of 21 November 2023, the Swiss Federal Supreme Court upheld a partial ruling by the Zurich Handelsgericht (HG190111-O), ordering an asset manager to account to a BVG/LPP pension fund for retrocessions received in connection with investments in target funds via two funds of funds. This commentary focuses on the question of the foundation's right to information regarding the retrocessions received by the fund manager (for a description of the facts and the issue of informed approval[...]

Members of the Board of Trustees must recuse themselves from all decisions in which they have a conflict of interest. Their knowledge cannot therefore be imputed to the foundation. This is one of the conclusions reached by the Swiss Federal Supreme Court in ruling 4A_350/2023 of November 21, 2023. A securities dealer (now called a securities firm, cf. art. 41 LEFin) provides asset management services for private and institutional clients. In particular, it manages the assets of a BVG pension[...]

In a recent ruling, the managing director of a bank was unsuccessful in his claim for back pay for untaken vacation, even though he believed he was entitled to it, since the severance agreement he had signed with the bank did not specifically address this issue (TF 4A_496/2022 of November 6, 2023). The facts were as follows: the managing director of a bank received an annual salary of 600,000 francs and was entitled to twenty-eight days' vacation per year. His[...]

On January 31, 2024, the Federal Council published the long-awaited preliminary draft of the revision of administrative criminal law. The consultation procedure will run until May 10, 2024. For the record, administrative criminal law is criminal law, with the distinctive feature that the prosecution and adjudication of offences fall within the remit of a federal administrative authority, which varies according to the field concerned (e.g. the Federal Department of Finance for administrative criminal law offences against financial market laws) (cf.[...]

The Swiss Federal Supreme Court has ruled that tax secrecy takes precedence over the principle of transparency (ruling intended for publication 1C_272/2022, delivered in open court by four votes to one). The origin of this ruling lies in the request of the NGO Society for Threatened Peoples, based on the Transparency Act (LTrans). The NGO was asking the Federal Office of Customs and Border Protection (FOCB) for access to detailed statistics on gold imports by major Swiss importers, for the[...]

The Swiss Federal Supreme Court examines a new case involving a change of fund management and the levying of transfer duties in the canton of Fribourg, confirming previous case law while clarifying who bears the economic burden of taxation (9C_312/2023 of December 7, 2023, intended for publication). The case concerns a real estate investment trust which has changed its fund management. E. SA was registered as a quasi-fiduciary owner of some fifteen properties in the canton of Fribourg and acted[...]

An auditor whose accreditation has been withdrawn asks to be allowed to plead his case in open court; the Federal Administrative Court rejects his request. On appeal, the Federal Court concluded that there had been a violation of the right to a public hearing enshrined in art. 6 par. 1 ECHR, and thus affirmed that the civil aspect of this provision applied to procedures for withdrawal of accreditation (TF 2C_384/2022 of November 14, 2023). The Swiss Federal Audit Oversight Authority[...]

On December 8, 2023, the Federal Council published a Swiss Climate Scores Update, a (slight) update of the Swiss Climate Scores introduced in June 2022. Without making any major changes, the review of this rating system introduces two new features: a new (optional) indicator focusing on the portfolio's investment objectives, to determine the extent to which the portfolio is aligned with the Paris Agreement objective (i.e., to keep the global average temperature increase below 2 C° above pre-industrial levels, and[...]

On December 19, 2023, the Swiss Commission for Fair Trading (Commission) published a new guideline dated November 22, 2023 on the subject of environmental and/or climate-related advertising. Role of the Commission As a reminder, the Commission is an independent institution whose aim is to ensure the self-regulation of advertising communications. Anyone is entitled to lodge a complaint with the Commission concerning commercial communications which they consider to be unfair within the meaning of the Federal Act against Unfair Competition (UWG).[...]

In recent years, staking services have proliferated, and with them the legal issues surrounding them. In order to clarify its practice, particularly with regard to the safekeeping of cryptoactives, FINMA has published Supervisory Notice 08/2023 on staking. FINMA defines staking as the process of blocking cryptoassets at the staking address of a validation node in order to participate in the validation process of a blockchain based on the proof-of-stake mechanism. In return, participants receive rewards. The communication clarifies the interpretation[...]

In ruling 6B_1176/2022 of December 5, 2023, the Swiss Federal Supreme Court overturns the acquittal of the former Chairman of the Board of Directors of a bank by the Court of Appeal of the Swiss Federal Criminal Court on the charge of violation of the duty to report under art. 37 para. 2 AMLA. The background is as follows. Albert was CEO of a bank from September 1, 2008 to September 30, 2012, before becoming Chairman of the Board of[...]

Even if the company carrying out the credit scoring is not the company that ultimately decides whether to grant a loan, it takes an automated individual decision and must therefore inform the data subject (CJEU ruling of December 7, 2023 in case C-634/21, SCHUFA Holding AG). Following the refusal of a loan by a bank, a German national requested various items of information from SCHUFA, the leading German company for credit checks. The refusal of the loan was justified on[...]

On December 19, 2023, FINMA published its report on Credit Suisse. This report discusses the background to the collapse (I.), and draws some "lessons learned" (II.). I. In 1856, Alfred Escher helped set up a company that excelled in commercial lending. The Schweizerische Kreditanstalt borrowed from Paul or Virginie at a lower rate than that at which it lent to "Rail" or "Wagon SA", and grew rich on the interest differential. One thing led to another, and the bank moved[...]

Do accounts opened with a Swiss bank by a foreign insurance institution (in order to deposit the premium paid by each of its policyholders) benefit from the privileged treatment of deposits? In ruling 5A_362/2023 of September 28, 2023, the Swiss Federal Supreme Court answered in the negative. The facts are as follows. A Luxembourg insurance institution offers life insurance contracts. For each policy taken out, the insurance company opens an individual account with a bank to deposit the premium paid[...]

On November 29, 2023, the Swiss Federal Data Protection and Information Commissioner (FDPIC) published nine recommendations relating to the acquisition of Credit Suisse by UBS. In essence, the Commissioner draws a distinction between, on the one hand, documents drawn up or communicated after the entry into force of the Necessity Ordinance of March 16, 2023 (Necessity Ordinance), access to which is expressly excluded under the Transparency Act (TransG) and, on the other hand, earlier documents which fall under TransG and[...]

In its decision 858/01 of November 1, 2023 in the case of VT5 Acquisition Company AG, the Swiss Takeover Board (STB) was asked to establish its practice with regard to De-SPACs (transactions whereby a Special Purpose Acquisition Company (SPAC) acquires its target). This decision was eagerly awaited, given that VT5 Acquisition Company AG (VT5) is the first SPAC under Swiss law. First of all, for a brief reminder of what a SPAC is and its specific features, please consult the[...]

On November 14, 2023, the Control Committee of the Council of States (CdG-E) published its follow-up report on the Confederation's involvement in the implementation of economic sanctions. Following recurrent criticism of Switzerland's policy in this area, which some consider too strict, others too lax, the Management Committees of the Federal Chambers of Parliament (CdG) had already decided in 2016 to commission the Parliamentary Control of Administration (CPA) to evaluate the Confederation's involvement in the application of economic sanctions. The task[...]

The Zurich Handelsgericht validates a margin call with a short delay of just over 24 hours in ruling HG200220-O of October 27, 2022, published on November 1, 2023. In this case, the CEO of a company based in Scotland, a qualified "professional" investor, and his ex-wife open a banking relationship with a bank in Zurich. They are both linked to the bank by a high-risk investment advisory relationship. As part of the banking relationship, the bank grants them a Lombard[...]

In a recent ruling, a bank manager was unsuccessful in his bid to obtain back pay, when he demanded a recalculation of his bonus based on assets under management that he claimed to have contributed to his employing bank (TF 4A_519/2022 of October 12, 2023). The facts were as follows: in 2009, a manager had organized a meeting between a business introducer, whom he knew, and a member of a bank's executive committee. Shortly afterwards, a second meeting was organized[...]

In a ruling handed down in the context of criminal tax law proceedings, the Swiss Federal Supreme Court has upheld the appeal lodged by bank account holders who had been denied the right to request the sealing of the documentation produced (ruling 7B_99/2022 of September 28, 2023). The background can be briefly summarized as follows. On the authorization of the Federal Department of Finance, the Federal Tax Administration (FTA) is conducting an investigation into suspicions that two individuals and a[...]

Is there a necessary link between control on the Board of Directors and control through a shareholder's voting rights? The Swiss Takeover Board (STB) had to decide this question in its decision 853/01 of August 31, 2023 in the case of GAM Holding AG. The STB had to rule on the validity of a clause conditioning a voluntary offer on the possibility of appointing all the members of the board of directors of a listed company. The appeal lodged against[...]

On October 19, 2023, the FATF published its fourth enhanced follow-up report on Switzerland since the 2016 mutual evaluation. The report is limited to Switzerland's progress in improving its compliance with Recommendations 10 (due diligence) and 40 (international cooperation). The FATF has highlighted three main improvements (two in connection with recommendation no. 10, one in connection with recommendation no. 40). The first is the amendment, with effect from January 1, 2023, of art. 4 para. 1 AMLA, which now expressly[...]

In a recent decision, the Criminal Appeal Court of the Vaud Cantonal Court confirmed the plaintiff status of a company taking over a company following a merger by absorption (decision Jug/2023/314 of May 4, 2023, published on October 23, 2023). This is a deliberate departure from the strict case law of the Swiss Federal Supreme Court. The ruling in question is not final. It is therefore possible that the matter will be brought before the Federal Court in the near[...]

The issues surrounding the return of retrocessions can be simplified into two questions: (i) must a retrocession be returned to the client? If so, (ii) how much information must the client be given in order to validly waive this return? In its ruling HG210223-O of June 21, 2023 (now in force), the Zurich Handelsgericht confirms its case law to the effect that a bank bound by an execution-only relationship with its customer is obliged to make restitution. The court also[...]

How can an insurer object to having to compensate a listed company for damage estimated at nearly a million following a successful cyber attack? On the grounds that the payment would contravene US sanctions, since the cyberattack was allegedly the work of Russian hackers under sanctions. However, the Zurich Handelsgericht and then the Swiss Federal Supreme Court were not convinced by this argument (4A_206/2023). In July 2020, a company listed on the NYSE fell victim to an attack by the[...]

The Federal Council has just announced that it does not wish to pursue work on the creation of a trust under Swiss law. The final say will rest with the Federal Assembly, which could refuse to shelve the 2018 motion, but such a refusal is unlikely. Why did this project fail? Was it unnecessary? One might have feared that the introduction of the trust as an institution of Swiss private law, enshrined in the Code of Obligations without being a[...]

15 years after the collapse of Lehman Brothers and 13 years after the FINMA reports "Madoff affair and distribution of Lehman products: implications for investment advisory and wealth management activities" and "Distribution of financial products to private clients", the collapse of the Lehman Brothers investment bank is back in the spotlight. the collapse of the Lehman Brothers investment bank is back in the spotlight of the Swiss legal scene. Should a bank compensate a client who has suffered a financial[...]

The Federal Council's preliminary draft revision of the anti-money laundering provisions, put out to consultation on August 30, is, in part, déjà vu. Indeed, when the Money Laundering Act (AMLA) was last amended - and came into force less than nine months ago - a parliamentary majority curtly refused to make certain activities linked to the creation and management of domiciliary companies or trusts subject to the AMLA. As the representative of the Federal Council pointed out during the parliamentary[...]