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02 May 2003
The directives have been issued by the Swiss Bankers Association's board of directors with a view towards ensuring the independence of financial research, and thus avoiding potential conflicts of interest. They also aim to ensure appropriate transparency and equal treatment of the recipients of financial research.
The directives apply to all banks incorporated in Switzerland. Banks are prohibited from using any of their branches or group companies which operate abroad to circumvent the directives.
According to the directives, the term 'financial analyst' covers bank employees or securities traders who compile and produce the bank's research reports which are destined for external publication. This covers both 'buy-side" and 'sell-side' analysts and primary and secondary research, and applies to both equities and fixed-income analysts.
The main principles set forth by the directives are as follows:
Once the directives have been incorporated into Appendix 1 of SFBC Circular 96/3, their implementation will be reviewed by banking auditors within the framework of the mandatory audit to be performed pursuant to the Swiss Banking Law.
The directives are to be considered as a code of conduct of the banking industry, and will therefore have no direct effect on the legal relationship between banks and their clients.
Since no transitional period is specified, the principles contained in the directives must be implemented as from July 1 2003.
The directives are in line with - and occasionally go further than - the latest
international regulatory requirements on the independence of financial research.
They thus aim to help boost the reputation of Swiss financial research.
For further information on this topic please contact Emmanuel Genequand or Guy-Philippe Rubeli at Pestalozzi Lachenal Patry by telephone (+41 22 80 94 500) or by fax (+41 22 80 94 501) or by email (email@example.com or firstname.lastname@example.org).
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