Financial Services Act (FinSA)
The new Financial Services Act (FinSA; German abbreviation: FIDLEG) entered into force on 1 January 2020. FinSA regulates the provision of financial services and the selling of financial instruments. FinSA aims to introduce greater and more sustainable protection of investors’ interests.
Zuger Kantonalbank made use of the two-year transition period and is FinSA-compliant as of 1 January 2022. During these two years it undertook an in-depth review of its financial services and made adjustments where necessary, informing its customers of these changes in good time.
FinSA mainly applies to the following areas:
- Strengthening of investor protection
- Transparency of financial products
- Revision of organisational requirements for the provision of financial services
What is important for you as a client of Zuger Kantonalbank?
Zuger Kantonalbank, Bahnhofstrasse 1, 6301 Zug is subject to supervision by the Swiss Financial Market Supervisory Authority (FINMA) and is a licensed bank and securities company.
Swiss Financial Market Supervisory Authority FINMA
031 327 91 00
Your satisfaction is important to us. If we should fail to meet your expectations, please contact your client advisor. Together we will find a solution that meets your needs. If your complaints and concerns cannot be resolved to your satisfaction, you can contact the Swiss Banking Ombudsman, a neutral, inexpensive or free mediation body.
Swiss Banking Ombudsman
043 266 14 14
According to FinSA there are three client segments: retail clients, professional and institutional clients. Retail clients enjoy the highest level of investor protection. In the case of professional and institutional clients, the bank may assume that these clients have the necessary know-how and sufficient experience and are able to financially bear losses of the investment strategy pursued. Natural persons and small and medium-sized enterprises are generally classified as retail clients. Zuger Kantonalbank informs those clients who are classified by the bank as professional or institutional clients. Institutional clients can declare that they wish to be considered professional clients and professional clients can declare that they wish to be considered retail clients so that they can benefit from higher protection under the FinSA (opting-in).
If a client instructs Zuger Kantonalbank to buy or sell financial instruments without prior advice (mere execution or transmission, execution-only), the Bank is not required to conduct a suitability or appropriateness test. Clients receive this information only at this point and not anew for each execution-only transaction.
If the bank provides asset management or portfolio-related investment advice, Zuger Kantonalbank carries out a suitability test. In this context, it is checked whether the investment strategy is compatible with the knowledge and experience, the financial circumstances and the investment objectives of the client.
For professional clients, the suitability test is limited to the client's investment objectives. No suitability test is carried out for institutional clients.
No appropriateness test is carried out for professional and institutional clients.
To make informed investment decisions, clients must know the characteristics and risks of financial instruments. The brochure "Risks Involved in Trading Financial Instruments" of the Swiss Bankers Association (SBA) provides simple and comprehensible information about their general characteristics and risks. You can find the link to the brochure here.
A key information document (KID) is available for many financial instruments. The purpose of a KID is to inform retail clients about the risks and costs of a financial instrument and to make it easier to compare different financial instruments.
The KID contains important data and informs investors about the following topics, among others:
- Name of financial instrument and details of issuer/producer;
- Information about the product approvals/licences pertaining to the financial instrument;
- The type and features of the financial instrument;
- The risk and earnings profile of the financial instrument with information about the highest loss that investors can potentially suffer;
- The costs of the financial instrument;
- The minimum investment period and the tradability of the financial instrument.
Instead of a KID, other documents can also be used (e.g. PRIIP). The KIDs and other accepted documents can be found at www.zugerkb.ch/key-information-document.
When Zuger Kantonalbank chooses financial instruments on behalf of clients, these originate from a predefined investment universe. The investment universe consists on the one hand of the bank’s own financial instruments or, occasionally, financial instruments of associated third-party providers (“proprietary financial instruments”) and, on the other hand, financial instruments from independent third-party providers. If the proprietary financial instruments are similar to those of independent third-party providers, Zuger Kantonalbank tends to recommend the proprietary financial instruments. As an alternative to proprietary financial instruments, an appropriate choice of independent providers is always available to clients.
Information on one-time and recurring costs and fees for financial services and information on general costs and fees incurred in financial transactions as well as information on how Zuger Kantonalbank deals with third-party services, can be found here in the condition brochures.
Information on the actual costs and fees for financial services and transactions is disclosed in the respective cost statements (e.g. key information document).
Zuger Kantonalbank respects the interests of its clients and avoids conflicts of interest as well as disadvantages for clients wherever possible. Accordingly, Zuger Kantonalbank has issued a directive to identify and resolve conflicts. If, in individual cases, conflicts of interest in connection with financial services cannot be completely avoided, Zuger Kantonalbank will provide appropriate notification here. The same applies to possible economic ties to third parties which could lead to a conflict of interest.
Typically, conflicts of interest can arise in particular
- through the use of proprietary financial instruments or those of affiliated third parties in the fields of investment advice and asset management
- in connection with the granting of special conditions
- in connection with capital market transactions (e.g. capital increases, primary placings or an allocation as part of an initial public offering)
- in connection with the sale of financial services and instruments
- if Zuger Kantonalbank is the custodian bank for a fund
- when defining incentives for employees
- when accepting donations from third parties in the context of financial services
- when employees of Zuger Kantonalbank take on mandates
- during the execution of customer orders
- through the acquisition of information that is not in the public domain
Zuger Kantonalbank can also benefit if it uses its own financial instruments such as funds and funds of Immofonds Asset Management AG (with which it has economic ties) in the fields of asset management and investment advice.
There is an inherent possibility that conflicts of interest in connection with the granting of special conditions cannot be completely avoided. It is therefore not possible to rule out that an individual customer may be disadvantaged.