Investor protection

In the event that a bank or securities dealer is declared bankrupt, deposits of up to CHF 100,000 per client enjoy privileged treatment. This extends to all client deposits, including those made at branches of banks or securities dealers outside Switzerland.

Provided the bank or securities dealer has sufficient liquidity, privileged deposits of up to CHF 100,000 held at branches in Switzerland or abroad will be satisfied immediately, without set-off and separately from the standard schedule of creditors.

In the event that privileged deposits cannot be paid out immediately, the Deposit Protection Scheme steps in for privileged deposits held in branches in Switzerland. This guarantees payment of protected deposits by way of an advance within three months. Where payments are made under the Deposit Protection Scheme, the privileged claims are assigned over to it.

Other separate privileged arrangements apply to deposits with bank and vested benefits foundations, up to a maximum of CHF 100,000. However, these do not benefit from additional cover under the Deposit Protection Scheme and there is no immediate payout separate from the schedule of creditors.

If it is not possible to pay out privileged deposits in full even under the Deposit Protection Scheme, they will be satisfied by way of a dividend in bankruptcy. Privileged deposits are secured by assets located in Switzerland, to ensure full payment of such deposits in the bankruptcy proceedings at the latest.

Unlike cash deposits, assets lodged for safekeeping (such as shares, units in collective investment schemes and other securities) are client property, and in the event of the bankruptcy of a bank or securities dealer are immediately ringfenced and released to clients separately from the bankruptcy proceedings. They therefore do not form part of the bankruptcy estate at any time. This applies to all assets which are client property and have been lodged for safekeeping, including precious metals physically held at the bank.