The case

Sandro Abegglen’s article in ZSR 2025 I (Volume 144, Issue 2, pp. 113 ff.) provides a comprehensive analysis of recent developments in Swiss retrocession law, particularly focussing on the Federal Supreme Court’s 2024 rulings and their implications for financial practice. Abegglen’s insights are invaluable for professionals navigating the evolving regulatory landscape.

Source: Retrocessions: Neuster Stand der Rechtsprechung und Einordnung, Sandro Abegglen in ZSR 2025 I Band 144 Heft 2 Seiten 113ff 

The commentary

1. Clarification of Waiver Requirements: The Federal Supreme Court’s clarification on the conditions for a valid waiver of retrocessions forms a pivotal aspect of Abegglen’s discussion. In its judgment 4A_574/2023 dated 24 May 2024, the Court emphasized that a waiver is only effective if the client has been adequately informed about the expected compensation. The Court made it a point to highlight the necessity for the disclosure of “key figures” from existing retrocession agreements, enabling clients to estimate the amount of retrocessions relative to the assets under management. A mere percentage based on invested assets is deemed insufficient, especially in asset management contexts.

2. Differentiation Between Asset Management, Investment Advice and Execution Only: Abegglen also addresses the varying information obligations depending on the type of financial service. In asset management and portfolio-related investment advice the requirements are more stringent compared to an “execution only” relationship. In the latter, indicating ranges of expected retrocessions may suffice for a valid waiver. This distinction was affirmed in the Geneva Court’s judgment ACJC/1002/2024 of 19 August 2024, which noted that the information requirements developed for asset management do not directly apply to execution only relationships, where clients make independent investment decisions.

3. Permissibility of Retroactive Waiver Clauses: The article further explores the Federal Supreme Court’s stance on retroactive waiver clauses. The Court ruled that such clauses in general terms and conditions are permissible, provided that the client has been transparently informed about the retrocessions. This was underscored in judgment 4A_574/2023, where the Court found that the information provided in the bank’s general terms and conditions was adequate for the client to comprehend the scope of retrocessions.

4. New Cantonal Case Law and Implications for FinSA and ISA: Abegglen also examines recent cantonal decisions and their impact on the Financial Services Act (FinSA) and the Insurance Supervision Act (ISA). FINMA Circular 2025/2, effective 1 January 2025, which outlines conduct obligations for financial service providers, is of particular importance. The circular mandates that information about third-party compensation, such as retrocessions, must be prominently disclosed in form contracts and made accessible to clients either physically or electronically.