January 2022
Introduction
The purpose of this information notice ("notice") is to inform our clients ("you") in accordance with our duty to do so under the Financial Services Act ("FinSA").This notice contains information on FundRock Switzerland SA, the financial services offered and the associated risks as well as on how conflicts of interests are handled.
The information contained in this notice can be amended from time to time. The latest updated version of this notice is available upon request.
Information on FundRock Switzerland SA
FundRock Switzerland SA,as part of the Apex Group, is a Swiss company acting as representative of foreign collective investment schemes ("funds") as well as distributor of funds structured as Undertakings for Collective Investment in Transferable Securities ("UCITS") and/or Alternative Investment Funds ("AIFs") covering a large range of asset classes.
FundRock Switzerland SA is licensed as a Swiss representative of foreign funds pursuant to the Swiss Collective Investment Schemes Act ("CISA") with its headquarters located at Route de Cité-Ouest 2,1196 Gland, Switzerland. FundRock Switzerland SA is subject to the supervision of the Swiss Financial Market Supervisory Authority ("FINMA") located at Laupenstrasse 27, 3003 Bern, Switzerland (www.finma.ch).
Financial services according to FinSA
FinSA regulates the provision of financial services and financial instruments to clients (as defined in FinSA; for more details on client classification, you may refer to the sections "Client classification" and "Change in client classification" below). FinSA applies to financial service providers, client advisors and producers of financial instruments.
FinSA defines the following activities carried out for clients as financial services:(a)acquisition or disposal of financial instruments, (b)receipt and transmission of orders in relation to financial instruments, (c)administration of financial instruments (portfolio management),(d)provision of personal recommendations on transactions with the financial instruments (investment advice),and(e)granting of loans to finance transactions with financial instrument.
The following are financial instruments that are subject to FinSA: (a)equity securities, (b)debt instruments (securities not classified as equity securities), (c)funds units, (d)structured products, (e) derivatives, (f)deposits whose redemption value or interest is risk or price dependent, excluding those where the interest is linked to an interest-rate index, and(g)bonds (unit in an overall loan subject to uniform conditions).
Financial services offered by FundRock Switzerland SA
When selling funds, FundRock Switzerland SA may provide a financial service that falls within the scope of FinSA, namely the acquisition and disposal of collective investment schemes (funds).
FundRock Switzerland SA does not provide other financial services as defined in FinSA. In particular, FundRock Switzerland SA does not provide discretionary investment management services (portfolio management) or, as a rule, non-discretionary investment advisory services (investment advice).FundRock Switzerland SA does not manufacture (produce) financial instruments. In principle, FundRockSwitzerland SA does not provide receipt and transmission of orders, such as transmitting subscription or redemption orders received from a client to the operator of a fund.
As a result, FundRock Switzerland SA neither applies appropriateness and suitability tests as defined in FinSA for portfolio management and investment advice services. FundRock Switzerland SA will not verify whether the funds offered to you are suitable or appropriate before proposing you such funds and such disclaimer will not be repeated prior to the provision of each individual service. FundRock Switzerland SA is not required to document your needs and does not maintain records and other investment management reports or statements. FundRock Switzerland SA is however subject to CISA and apply the code of conduct of the Asset Management Association Switzerland ("AMAS") in force at the time of the provision of the relevant service. Against this background, FundRock Switzerland SA is generally distributing its funds by treating clients with diligence, loyalty and ensure the transparence by providing all information in the relevant product documentation to the extent required and in accordance with applicable law.
Swiss representation services in accordance with CISA as well as other services offered by FundRock Switzerland SA, such as compliance services are not financial services under FinSA. This notice does not cover these services.
Client classification
FundRock Switzerland SA, as financial services provider, is required by FinSA to classify its clients into three categories where applicable: retail(private), professional and institutional clients.
Based on these classifications, the corresponding level of regulatory protection varies, depending on the client’s knowledge and experience in connection with investment matters:
- Retail (private) clients are granted the highest level of regulatory protection. Retail (private) clients are all clients who do not qualify as professional or institutional clients. The range of financial instruments available is generally limited to products targeted at retail (private) clients or to products explicitly registered for distribution to retail (private) clients;
- Professional clients are deemed to have the necessary knowledge and experience to invest in all asset classes and to be financially able to bear the investment risks associated with the financial service. Professional clients are sophisticated investors such as occupational pension schemes with professional treasury operations and companies with professional treasury operations. Professional clients have access to a wider investment universe compared to retail clients, which includes financial instruments intended only for professional clients or which are not registered for sale to retail (private) clients;
- Institutional clients are afforded to the lowest level of regulatory protection. Certain professional clients such as regulated financial intermediaries, insurance companies and central banks are deemed institutional clients and are treated as a separate segment of clients. Similar to professional clients, institutional clients have access to a wide range of financial instruments, however they are subject to the least client protection regulations in consideration of their assumed knowledge, experience in financial investments and capacity to bear losses.
If you do not agree with the initial classification by FundRock Switzerland SA, you can request a change in your classification as long as you meet the necessary legal requirements (for more details, you may refer to the section "Change in client classification" below), and that the requested classification falls within the range of funds offered by FundRock Switzerland SA.
Change in Client Classification
Clients may declare in writing or in another form demonstrable via text as agreed with FundRock Switzerland SA that they wish to "opt out" (reduce their regulatory protection) or, alternatively, "opt in" (increase their regulatory protection). The following changes of categories are allowed by FinSA:
High net worth individuals(HNWIs)and related investment structures
High-net-worth retail clients and private investment structures set up for HNWIs (without professional treasury operations) may declare in writing that they wish to be treated as professional clients ("opting out"), provided that the following criteria laid down by FinSA are met:
- based on education and professional experience or on the basis of comparable experience in the financial sector, the clients possess the necessary knowledge to understand the risks associated with the investments, and
- the clients have at their disposal financial assets of at least CHF 500,000;
or
- the clients have at their financial assets of at least CHF 2 million.
Eligible "financial assets" include financial investments held directly or indirectly by the clients, in particular: (i) sight or time deposits with banks and securities firms, (ii) certificated and uncertificated securities, including collective investment schemes and structured products, (iii) derivatives, (iv) precious metals, (v) life insurance policies with a surrender value, (vi) restitution claims from other assets held in trust specified in cif. (i) to (v) above. Direct investments in real estate and claims from social insurance schemes as well as occupational pension assets do not qualify as financial investments.
Professional clients
Occupational pension schemes and other institutions whose purpose is to serve occupational pensions with professional treasury operations and companies with professional treasury operations may declare in writing that they wish to be treated as institutional clients ("opting out") or, on the other hand, all professional clients that are not institutional clients may declare in writing that they wish to be treated as retail (private) clients ("opting in").
Institutional clients
Institutional clients may declare in writing or in another form demonstrable via text, as agreed with FundRock Switzerland SA, that they wish to be treated as professional clients ("opting in").
Should a client wish to "opt-in" or "opt-out", please reach your contact at FundRock Switzerland SA or send us an email at frs-team@fundrock.ch.
Conflicts of interests and economic ties to third parties
FundRock Switzerland SA adheres to the strictest ethical standard and is committed to actin the best interest of its clients. FundRock Switzerland SA is a member of Apex Group (www.apexgroup.com) and distribute certain funds managed or provided by certain Apex Group entities, such as FundRock Management Company S.A. or LRI Invest S.A. Members of the staff of FundRock Switzerland SA may take minority interest for their own account in funds promoted by FundRock Switzerland SA to Swiss prospects and clients, provided such investment is not detrimental to investors. Neither FundRock Switzerland SA nor any members of its staff is involved in the management of these funds. FundRock Switzerland SA has implemented organizational measures to prevent situations of conflict of interests that could arise between itself (including its employees and its business partners or affiliates) and those of its clients. If unavoidable conflicts of interests should nevertheless arise, you will be informed without delay. The information provided will cover (i) the nature of the conflict,(ii) the underlying reason for it, and (iii) the associated risk to you. You will also receive transparent information on the manner the conflict of interest will be handled.
Distribution Fees / Third party remuneration
When offering third party fund(s), FundRock Switzerland SA may receive commissions from third party investment managers, promoters, fund(s) or their agents. The commissions are calculated based on either assets under management ("AUM") raised (closed ended funds) or management and/or performance fee ("MF&PF") collected by the managers (closed ended and UCITS funds) and expressed in percentage (commissions are generally calculated as a percentage comprised in a range between 0.5% and 1.5% of AUM and/or 10%and 20% of MF&PF). These commissions are paid to us once at the time of subscription for closed end funds and generally each quarter for open-ended funds. You understand and agree that the FundRock Switzerland SA will retain such commissions as a remuneration for its marketing and distribution activities.
Market Offering Considered
The market offering considered when selecting the funds offered to the distribution does not include only funds of Apex Group but also funds promoted by third parties independent from FundRock Switzerland SA and other Apex Group affiliates.
Information on Risks
Transactions in financial instruments, including funds, involve opportunities and risks. It is important that you understand these risks. FundRock Switzerland SA takes into account a broad range of funds when providing financial services to you, which comprises both Apex branded products and products of numerous third-party providers.
A general description of the major risks associated with such financial instruments used in connection with our financial services can be found in the brochure ‘Risks Involved in Trading Financial Instruments’ published by the Swiss Bankers Association ("SBA"), which can be downloaded from the following link:
https://www.swissbanking.ch/_Resources/Persistent/c/8/4/0/c840d1f03cf558 c4a0dddcc9f94cb8e5c984125e/SBA_Risks_Involved_in_Trading_Financial_Instr uments_2019_EN.pdf. Detailed information on risks is also enclosed in the relevant fund documentation, in particular fund prospectuses, offering or private placement memoranda that are provided to you.
Additional risks include in particular:
- risk of maintaining the substance of the underlying assets respectively the risk of loss of value of the funds in the client's portfolio: this risk, which may vary depending on each fund, is borne entirely by the client;
- client information risk respectively the risk that the client does not have enough information to be able to make an informed investment decision. The client makes the investment decisions without the intervention of FundRock Switzerland SA. As a result, the client needs specialized knowledge to understand the financial instruments and time to become familiar with the financial markets. If the client does not have the necessary knowledge and experience, the client takes the risk of investing in a financial instrument that is not appropriate or adequate for him, her or it;
- risk of timing of order processing, respectively the risk that the client places a buy or sell order with the relevant fund operator at an inappropriate time, which may lead to price losses;
- risk of insufficient monitoring or the risk that the client does not monitor his, her or its investment or does not monitor it sufficiently: FundRock Switzerland SA is not obliged at any time to monitor, warn or inform. Insufficient monitoring by the client can be associated with various risks, such as concentration risks.
Mediation body (ombudsman)
FinSA provides for a mediation before an ombudsman to settle legal disputes between clients and financial services providers.
For this purpose, FundRock Switzerland SA has a duty to be affiliated with an ombudsman that has been recognized by the Swiss Federal Department of Finance.
The ombudsman is a free and neutral information and mediation agency and the client may refer any matter to the ombudsman, if it has not reached a prior settlement with FundRock Switzerland SA.
FundRock Switzerland SA is affiliated with:
Finanzombudsstelle Schweiz (FINOS)
Talstrasse 20, 8001 Zürich, Switzerland
+4144 552 08 00 / www.finos.ch
