26 September 2013 | Publication
Trailer Fees and Inducements: Swiss
Supreme Court Decision and Client Rights
26 September 2013 | Publication
Trailer Fees and Inducements: Swiss
Supreme Court Decision and Client Rights
Caplaw 2012, p. 9 ff.
Accounting to Clients for Trailer Fees and Inducements - The Decision of the Swiss Supreme Court 4A_127/2012 and 4A_141/2012 of 30 October 2012 and its Regulatory Consequences
The publication analyses key Swiss Supreme Court decisions holding that banks and asset managers must, in principle, account to clients for trailer fees and other inducements received in connection with portfolio management mandates. The Court clarified that such payments—including commissions, rebates and kickbacks—are considered benefits linked to the mandate and must be disclosed and transferred to clients due to potential conflicts of interest. Following these rulings, FINMA required financial institutions to inform clients of their rights and implement procedures to handle related claims, significantly increasing transparency obligations in the Swiss financial industry.
Accounting to Clients for Trailer Fees and Inducements - The Decision of the Swiss Supreme Court 4A_127/2012 and 4A_141/2012 of 30 October 2012 and its Regulatory Consequences
The publication analyses key Swiss Supreme Court decisions holding that banks and asset managers must, in principle, account to clients for trailer fees and other inducements received in connection with portfolio management mandates. The Court clarified that such payments—including commissions, rebates and kickbacks—are considered benefits linked to the mandate and must be disclosed and transferred to clients due to potential conflicts of interest. Following these rulings, FINMA required financial institutions to inform clients of their rights and implement procedures to handle related claims, significantly increasing transparency obligations in the Swiss financial industry.
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Rashid Bahar