03/12/2012
Finma orders banks to refund commissions
The Swiss Federal financial market surveillance authority (Finma) at the beginning of last week published a statement on the consequences of a verdict by e Federal court in late October in the commission case. The five-page document leaves no doubt: commissions are subject to a requirement that they be repaid to the client. “Agent’s commissions retained by banks in their role as wealth managers belong to the client,” Finma writes, summarizing the verdict of the Federal court.The Federal court has found in favour of a claim from a UBS client, and has cited a 2006 precedent in the area of commissions. Banks will not be allowed to retain commissions except when they have a declaration from the client allowing it. As a result, Finma is now requiring banks concerned to take four actions: first, they must immediately adjust their current activities to reflect the decision of the Federal court. Secondly, banks must contact all potential clients who may have been affected, to make them aware of the verdict of the court.Thirdly, banks must inform clients of their service at the bank who may need to provide them with further clarifications on these repayment obligations. Lastly, clients are entitled to be informed on request about the amounts of commissions which they may be repaid.
