Commentaries

On 22 September 2021, FINMA published a Practical Guide aimed at setting out its practice regarding changes within banking bodies and, more specifically, at providing an overview of the assessment criteria that it generally applies in the context of examining the guarantee of irreproachable activity. Concept of body The concept of a governing body extends to the persons responsible for administering and managing the bank. Holders of qualified participations, although also subject to an examination from the point of view[...]

When a bank informs its client that it will liquidate his securities if he does not react within the allotted time, can the client complain after the fact about the liquidation of his securities? The Federal Court addressed this issue in its ruling 4A_354/2020 of 5 July 2021. A Mexican national has had a bank account in Geneva since 2006. In 2010, the bank amended its general terms and conditions so that it could terminate the contractual relationship at any[...]

Background The case concerns five investors who subscribed to (unlisted) shares in a public limited company when it was founded or during subsequent capital increases. They consider that they were misled by inaccurate information contained in the issue prospectus on which they based their investment decision. They brought a civil action before the Commercial Court against various persons and entities who had participated in the drafting or dissemination of the disputed prospectus, claiming damages from them jointly and severally, in[...]

In a Memorandum dated 25 June 2021, the Federal Data Protection and Information Commissioner gives his opinion on the lawfulness of the transfer of personal data to the Securities and Exchange Commission (SEC) by Swiss companies registered with this American authority. The SEC contacted the Federal Commissioner in December 2020 to find out if and under what conditions Swiss companies could transmit personal data to it as part of its oversight. Even if the Memorandum does not specify it, one[...]

In a ruling 6B_103/2021 of 26 April 2021, the Federal Court once again considers the status of the complainant as the holding of a group of companies, one of whose subsidiaries has been the victim of acts of disloyal management (art. 158 CP). The facts are relatively complex, but can be summarised as follows. Company A SA is the Geneva-based holding of company group A, which is active in the pharmaceutical sector. C and E are shareholders and directors of[...]

On 12 May 2021, the Court of Justice of the European Union (CJEU) issued a ruling in which it restricted the competent courts under Art. 7(2) of the Brussels I bis Regulation (BI bis) for investor actions. According to the CJEU, only the courts of the state in which a listed company must fulfil its legal reporting obligations can be seized for these disputes (C-709/19). In this case, the Vereniging van Effectenbezitters (VEB), a Dutch association of shareholders, had taken[...]

The theory of nudges, developed by American academics Richard Thaler (Nobel Prize in Economics 2017) and Cass Sunstein, postulates that it is possible to regulate certain behaviours without implementing restrictive rules. Instead, Thaler and Sunstein suggest influencing human choices using various methods of elementary psychology, with the aim of encouraging certain socially beneficial behaviours, without, however, making them compulsory. A typical example is that of a cafeteria: it is possible to encourage people to eat better, but without reducing their[...]

In its ruling 4A_599/2019, the Federal Court considered a request for the submission of accounts by a client against his bank following a dispute over a margin call. In November 2010, the client opened an account with a Swiss bank in order to invest his assets through foreign exchange transactions and by buying and selling options on currencies and precious metals. He received a loan from the bank and signed a general pledge agreement. After the SNB abandoned the minimum[...]

The CDB Supervisory Commission recently published its traditional overview of its decisions for the second half of 2020. After a restricted financial year due to Covid-19 at the beginning of the year, supervisory activities resumed their normal course in the summer of 2020. While no notable reversal of case law has been reported, a few cases are worth mentioning. Firstly, with regard to procedure, Art. 60 para. 1 CDB (investigation procedure) does not make the opening of an investigation for[...]

Who, the bank or the customers, should bear the damage caused by the execution of orders from hackers? Shortly after the ATF 146 III 326 (cf. cdbf.ch/1150/), in which the Federal Court denied a trading company's gross negligence, the Ticino Court of Appeal was confronted with the same issue. Contrary to the decision of the Federal Court, it finds that the bank committed a serious offence, emphasising the danger of email communications (Judgment 12.2019.148 of 18 September 2020). Two brothers,[...]

In a judgement 1C_196/2021 of 28 May 2021 intended for publication, the Federal Supreme Court clarifies the concept of secondary insider within the meaning of Art. 154 para. 3 FMIA in the context of an extradition request. On 5 January 2021, the Federal Office of Justice (FOJ) ordered the extradition of an individual A. (Appellant) to the United States. He is accused of having committed large-scale insider trading offences from 2013 to 2017. A. and an accomplice are alleged to[...]

In its judgement 4A_287/2020 of 24 March 2021, the Federal Supreme Court considers the question of the enforcement of a decision to render an account, and makes three cautions: the conclusions to be enforced must be precise, possible and covered by the decision on the merits. A company and a bank were bound by a set of banking contracts, in particular for the purchase and sale of options, as well as by a Lombard loan, which gave rise to disputed[...]

After a Report 2019 reduced to statistics, the Report 2020 returns to a format more in line with the tasks of the MROS, which include raising awareness among financial intermediaries (see typologies in section 5) and informing the public about developments in the fight against money laundering. Statistics (section 4) MROS has changed its working method, making direct comparison with previous years difficult. However, it provides information that allows a certain degree of comparability to be restored. The trends of[...]

On 19 May 2021, the Federal Council adopted the Dispatch on the Federal Act on the Regulation of the Activity of Insurance Intermediaries. This draft law, which amends the Federal Health Insurance Act (LSAMal) and the Federal Insurance Act (LSA), aims to regulate the activity of intermediaries active in social health insurance and supplementary health insurance. As a reminder, the Federal Office of Public Health is responsible for supervising insurers active in social insurance, while the FINMA is responsible for[...]

SIX Exchange Regulation SA, the regulatory and supervisory body of the SIX Swiss Exchange, has announced a change to the Listing Rules (LR), the Directive on Ad hoc Publicity (DAP) and the Directive on Information relating to Corporate Governance (DCG) concerning ad hoc publicity, which will come into force on 1 July this year. This revision introduces an obligation to qualify event-driven announcements as such (‘flagging’). It modifies the definition of facts likely to have an influence on prices in[...]

Following the rejection on 29 November 2020 of the popular initiative ‘Responsible Businesses - Protecting Human Rights and the Environment’, the indirect counter-project should, barring a referendum, amend accounting law as of 1 January 2022 with an obligation of transparency on non-financial issues (art. 964 bis to 964 quater CO) according to the model of Directive 2014/95/EU and obligations of diligence and transparency regarding minerals and metals from conflict zones and child labour (art. 964 quinquies to 964 septies )[...]

On 21 April 2021, the European Commission unveiled its draft regulation on artificial intelligence (P-RIA) aimed at establishing harmonised rules for artificial intelligence (AI) applicable in all European Union Member States. With the P-RIA, the Commission wants to establish a regulatory framework that allows AI to be used in accordance with European values, while encouraging innovation. The P-RIA adopts a risk-based approach and establishes an ex ante and ex post oversight regime. AI providers and other actors designated by the[...]

In a ruling 4A_223/2020 handed down on 30 October 2020 concerning a bank guarantee, the Federal Court had the opportunity to consider the consequences of an imprecise designation of the principal in the beneficiary's request for payment, and the consequences of the fact that the guarantee designated as a party to the underlying contract not the principal but a sister company of the principal. An independent guarantee had been issued by a bank based in Austria on the instructions of[...]

In a judgment handed down on 16 October 2020 (RR.2019.349+RR.2019.350+RR.2019.351), the Federal Criminal Court (FCC) analysed the conditions under which a bank believing it has rights to some USD 37 million deposited in accounts opened in its books, can oppose their surrender to a foreign state. In criminal proceedings conducted in particular on charges of stock market offences, the United States, through the Department of Justice, sent several requests for international mutual assistance in criminal matters to Switzerland, including one[...]

Under what conditions does a complaint clause take effect? In a ruling dated 1 December 2020, the Geneva Court of Justice examined this issue in a case in which a client had delayed contesting transactions allegedly carried out without her instructions (ACJC 1747/2020, now final). The client, who studied finance and worked at a bank in England, opened an account in Geneva. She did not grant the bank any mandate for asset management or investment advice. She signed the contractual[...]

Last Friday, the Federal Assembly adopted the revision of the Anti-Money Laundering Act (AMLA), which was initiated following the 4th mutual evaluation report on Switzerland by the FATF. The debates were lively, but in the end, the mountain gave birth to a mouse. The most significant amendments were rejected, in particular the subjection to the AMLA of ‘advisors’, i.e. those who carry out professional activities related to the creation and management of domiciliary companies, and the lowering of the cash[...]

Does the right not to contribute to one's own incrimination allow a person to refuse to cooperate with a European financial market supervisory authority? In a judgment of 2 February 2021 (C‑481/19), the Court of Justice of the European Union (CJEU) examined this issue in connection with Regulation No 596/2014 on market abuse. The Commissione Nazionale per le Società e la Borsa (Consob), the Italian stock exchange supervisory authority, imposed a fine of EUR 50,000 on a natural person. The[...]

In a judgment published on 11 January 2021, the Federal Supreme Court (FSC) upheld the conviction of the head of the compliance unit for French-speaking Switzerland at a bank for negligent breach of the obligation to report suspected money laundering (Art. 37 para. 2 AMLA) between 16 May and 6 June 2011 (6B_786/2020). Initially convicted by a criminal ruling of the Federal Department of Finance (FDF), this person, whom we will call Arthur, was then acquitted by the Criminal Division[...]

How can you assess the chances of success of a lawsuit against an asset management company? A recent Geneva court ruling opens the door to a judicial assessment through the procedure of evidence for the future (Civil Chamber of the Court of Justice, 14 December 2020, ACJC/1791/2020). Let us begin with a brief legal overview before turning to the facts of this ruling. Under Art. 158 CPC, the procedure for obtaining evidence in anticipation of future legal proceedings allows the[...]

The Brexit, which took effect on 31 January 2021, is now having a direct impact on UK-Swiss relations in the financial sector. In addition to ongoing discussions on mutual recognition, which remain at a high level for the time being, the UK has recognised the equivalence of Swiss regulations on trading venues for the purposes of Art. 23 MiFIR (see The Markets in Financial Instruments (Switzerland Equivalence) Regulations 2021 adopted on 12 January 2021, presented to parliament on 13 January[...]

In a ruling dated 14 January 2021 (4A_556/2019), the Federal Supreme Court examined the question of whether the ratification of a portfolio valuation by the client constitutes a tacit change to the investment profile. In November 2010, a Panamanian company gave a management mandate to a Swiss bank. They agreed that the management would be carried out conservatively in accordance with the pre-printed ‘Investment instructions for management mandates’. However, following a decline in performance, the beneficial owner (ADE) of the[...]

On 1 December, the SBA notified its member banks of the revised Guidelines on Asset Management Mandates (previously: Depierre, cdbf.ch/900/). Two important points should be noted. The first is the entry into force on 1 January 2020 of the Financial Services Act (LSFin) and its implementing ordinance (OSFin), which are partly based on MiFID II. The second is that the ASB has given the guidelines the status of voluntary self-regulation, meaning that they are not binding in the same way[...]