The Swiss banking industry has a long tradition of self-regulation. In collaboration with the Federal Banking Commission (FBC), their regulatory authority, Swiss banks draw up binding codes of conduct which define what constitutes good industry practice or, to put it in more modern terms, ethically correct management. One example of a code of conduct is the Agreement on Due Diligence (CDB). The FBC monitors the banks' compliance with these codes of conduct. Compliance with suggested guidelines, on the other hand, is voluntary. The FBC is not involved in such matters.

The basic principles
For decades, Swiss banks have issued codes of conduct governing segments of the industry. The following basic principles apply:

• It makes sense to have a code of conduct wherever the legislature has left room for one, or where it is in the banks' interests to voluntarily set standards for their conduct.
• Codes of conduct are submitted to the FBC prior to being issued and are binding for all banks once approved. The FBC monitors the banks' compliance with the voluntary codes of conduct through the auditors required by banking law, just as it monitors compliance with laws, ordinances and its own guidelines.
• The FBC can impose sanctions on banks for any infringement of the codes of conduct.
• The banks' codes of conduct are:
  - guidelines approved by the Board of Directors of the Swiss Bankers Association;
  - agreements signed by the banks.

Simple recommendations which do not require FBC approval and which are not monitored by the FBC are not classed as codes of conduct.

The codes of conduct (guidelines/agreements)
The most important codes of conduct in the Swiss banking industry are as follows:

Agreement on Due Diligence (Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence, CDB): the latest revised version came into force on 1 July 2003. The CDB obliges banks to know their customers. Order

Agreement on depositor protection (Agreement on depositor protection in the case of compulsory bank liquidation), in force since 1 January 2006, guarantees a bank's individual creditors (depositors) fast-acting protection up to CHF 30000 should the bank collapse (bankruptcy, probate proceedings). This agreement protects savings, salary, pension, investment and custody accounts as well as medium-term notes. Order

Code of conduct for securities traders In force since 1 August 1997, this code of conduct applies to all securities traders subject to the Swiss Stock Exchange Act. It specifically describes the responsibilities of securities traders with regard to disclosure, due diligence and loyalty as defined in Article 11 of the Stock Exchange Act. It is aimed at ensuring professional, fair and transparent services. Order

Guidelines for the management of country risk In force since 31 December 1997, these guidelines stipulate minimum requirements for banks with regard to internal structures and processes for managing country risk. Order

Guidelines on portfolio management agreements In their current version, in force since 1 January 2006, these guidelines set out the principles of portfolio management (provision of information for clients, need for agreements to be confirmed in writing, continuous monitoring of entrusted assets etc.). Order

Guidelines for the treatment of dormant assets The latest revised version has been in force since 1 July 2000. These guidelines concern avoiding instances where assets become dormant and, in cases where dormancy nevertheless occurs, re-establishing contact with the customer. They describe the banks' duties with regard to newly dormant assets and regulate the procedures for tracing dormant assets. Order

Directives on the Independence of Financial Research Order

Allocation directives on the New Issues Market Order

Guidelines on informing investors about structured products Order

Recommendations for Business Continuity Management (BCM) Order