Swiss Federal Supreme Court ends the
retrocession saga: No restitution duty
in execution-only relationships

In a landmark decision (4A_149/2025, 12 January 2026), published on 13 February 2026, the Swiss Federal Supreme Court has now clarified a two-decade uncertainty and confirmed that retrocessions received by the bank in execution-only mandates are not subject to restitution either under Art. 400 para. 1 of the Swiss Code of Obligations (“SCO”) or Art. 26 of the Financial Services Act (“FinSA”).

The Federal Supreme Court determined that, within an execution-only relationship, the bank's responsibilities are confined exclusively to carrying out the client's instructions. Consequently, any retrocessions received are solely attributable to the client's orders and do not present a conflict-of-interest risk. Since both Art. 400 SCO and Art. 26 FinSA require the presence of such a risk—which is absent in an execution-only context—there is no obligation to provide restitution under this framework.