Basel, 15 March 2007 – The Swiss Bankers Association is issuing new self-regulatory Guidelines governing the information banks must provide to investors about structured products. These Guidelines thereby implement the provisions of the Federal Act on Collective Investment Schemes governing investor protection with regard to this type of investment. The Guidelines will increase transparency for the investor and at the same time preserve the high capacity for innovation for issuers. The new Guidelines have been approved by the Swiss Federal Banking Commission and will come into force on 1 July 2007.

The market for structured products is growing rapidly. According to figures from the Swiss National Bank, at year-end 2006 the value of structured products held in clients’ custody accounts in Switzerland reached CHF 284 billion.

The Federal Act on Collective Investment Schemes (CISA) which came into force at the beginning of 2007 requires banks to produce a simplified prospectus with information to help protect investors in structured products. According to the Ordinance on the CISA, responsibility for the contents of the prospectus lies in principle with the issuers of structured products. The Swiss Bankers Association (SBA) therefore formulated the new Guidelines to set minimum standards for the information which banks must provide to investors in structured products. The SBA is convinced that these self-regulatory Guidelines will work in the best interests of investors by creating more transparency and better protection while at the same time avoiding unnecessary bureaucracy and overregulation that might otherwise restrict innovation and dull the future of a promising business.

The Guidelines in principle restrict themselves to unlisted structured products offered to the public in or from Switzerland. However, no simplified prospectus is required for products which will be quoted on the SWX Swiss Exchange because the information issued by SWX for these products will in any case cover transparency requirements as stipulated by law. Neither do the Guidelines apply to products for which a prospectus compliant with the EU Prospectus Directive is available, in cases where those products are distributed from Switzerland, but not in Switzerland. In addition, a simplified prospectus is not required for products sold exclusively to so-called “qualified investors”. The Guidelines also record the fact that structured products do not need approval from the regulator and that they are not subject to the CISA.

The Guidelines give details (Art. 5ff) about the compulsory points a simplified prospectus must cover to create improved transparency for investors not only about the product itself but also about the risks associated with structured products and their issuers.

The new Guidelines have been approved by the Swiss Federal Banking Commission and will enter into force on 1 July 2007. They will not apply retrospectively to previously-issued products.

Note to journalists
The full text of the new Guidelines on Informing Investors about Structured Products is available on the following link: PDF