Information note (LSFin / OSFin – FinSA / FinSO)

I. INTRODUCTION

Switzerland has adopted the Federal Law on Financial Services (FinSA) and its implementing ordinance (FinSO). They entered into force on 1 January 2020. The (main) deadline for their implementation is 31 December 2021.
 

This new legislation aims to improve investor protection.
 

Suntrust Investment Co Ltd (hereinafter: "the Company" or "the asset manager") is subject to this law insofar as it carries out asset management for individual portfolios.

II. GENERAL INFORMATION REQUIREMENTS FOR THE FINANCIAL SERVICE PROVIDER

A. Contact details, scope of activity and monitoring regime

The Company is a Swiss company registered in the Commercial Register of the Canton of Geneva since 15 November 1983.
 

The Company has its registered office and offices at des Battoirs 7, 1205 Geneva.

Its contact details are as follows:

• Telephone number: +41 22 708 09 08
• Email : info@suntrust.ch

The Company offers asset management services for individual portfolios to Swiss and foreign clients.

Since 1 January 2020, it has been subject to the Federal Law on Financial Institutions (FINA). As such, it has initiated the process of applying to FINMA for an "Asset Manager" licence within the meaning of Article 17 et seq.

The Company is affiliated with the Self-Regulatory Organisation (SRO) of AOOS and upon approval by FINMA will be subject to the following Supervisory Body (SB) pursuant to Article 43a of the Swiss Financial Market Supervision Act (FINMASA):

• Name: AOOS - Swiss supervisory corporation
• Address : Rue Rousseau 30 - 1201 Geneva
• Telephone: +41 22 343 40 00
• Email : infogeneve@aoos.ch

B. Professional secrecy

The Company is obliged to observe professional secrecy in its business relationship with the client and to treat as confidential all data, information and specific documents on the client received in the course of the business relationship. This obligation shall continue after termination of the contractual relationship.

C. Dormant assets

Sometimes contact with clients is broken off and assets subsequently become dormant. These assets may be permanently forgotten by clients and their heirs. The following is recommended to avoid losing contact:
 

• Changes of address and name: Please inform us immediately if you change your place of residence, address or name.
• Special instructions: Please inform us in case of long absences of the redirection of correspondence to a third address or reluctance to correspond and your availability in case of emergency during this period.
• Granting powers of attorney: It may be advisable to appoint an authorised person, whom the Company can contact in the event of loss of contact.
• Trusted person and testamentary disposition: Another way to avoid a loss of contact is for a trusted person to be informed of the relationship with the asset manager. However, the Company may only provide information to such a trusted person if he has been authorised to do so in writing. In addition, the assets concerned may be mentioned in a will, for example.

D. Mediation procedure with a mediation body approved by the Federal Department of Finance

Financial service providers must be affiliated to a mediation body. Disputes between a financial service provider and a customer can thus be settled by mediation, which does not, however, exclude legal proceedings. The mediation procedure is fair, quick, impartial and inexpensive for the customer, or even free of charge.
 

The Society is affiliated to the following mediation body:

• Name: SFO - Ombud Finance Switzerland
• Address : Boulevard des Tranchées 16 - 1206 Geneva
• Telephone: +41 22 808 04 51
• Email : contact@ombudfinance.ch

III. INFORMATION ON GENERAL RISKS RELATED TO FINANCIAL SERVICES AND INSTRUMENTS

A. Discretionary asset management risks

a. In general

The Company offers discretionary asset management services. In this context, the client entrusts the Company with assets and gives it a mandate to invest them on his behalf in financial instruments. The asset manager manages the assets that the client has deposited with a custodian bank in the name, on behalf and at the risk of the client. The asset manager ensures that the transactions he carries out correspond to the client's profile and the agreed investment strategy and that the structuring of the portfolio is appropriate. Investment decisions are made entirely by the Company (without prior consultation with the client).
 

Such an asset management activity involves transactions in financial instruments which are associated with opportunities and risks of varying degrees depending on the investment strategy agreed with the client. It is therefore important that the client understands these risks before using this financial service and defining an investment strategy.
 

Within the framework of asset management, the asset manager carefully selects the investments to be included in the portfolio within the framework of the market offer under consideration. The asset manager ensures an appropriate spread of risks, insofar as the investment strategy allows.
 

The asset manager regularly informs the client about the agreed and provided asset management.
 

b. Risks

In the context of asset management, there are, in principle, risks that fall within the client's risk sphere and are therefore borne by the client:
 

• The risk of the chosen investment strategy: Various risks may arise from the investment strategy chosen and accepted by the client. These risks are fully borne by the client. A presentation of the risks and an explanation of the corresponding risks are provided before the investment strategy is adopted.
• The risk of loss of value of the financial instruments in the portfolio: This risk, which may vary depending on the financial instrument, is borne entirely by the client. For the risks associated with the various financial instruments, please refer to the brochure "Risks of trading in financial instruments" of the Swiss Bankers Association.
• Information risk on the part of the asset manager or the risk that the asset manager has too little information to be able to make an informed investment decision: When managing assets, the asset manager takes into account the client's financial situation and investment objectives. If the client provides the asset manager with insufficient or inaccurate information regarding his financial situation and/or investment objectives, there is a risk that the asset manager will not be able to make investment decisions that are suitable for the client.
• The risk as a qualified investor in collective investment schemes: Clients who use asset management in the context of a long-term asset management relationship are considered qualified investors within the meaning of the Collective Investment Schemes Act. Qualified investors have access to forms of collective investment schemes that are exclusively open to them. This status allows a broader range of financial instruments to be taken into account in portfolio design. Collective investments for qualified investors may be exempt from regulatory requirements. These financial instruments are therefore not or only partially subject to Swiss regulation. This may give rise to risks, particularly with regard to liquidity, investment strategy or transparency. Detailed information on the risks arising from a particular collective investment can be found in the constituent documents of the financial instrument and, where applicable, in the basic information sheet and the prospectus.

In addition, asset management involves risks which fall within the risk sphere of the asset manager and for which the latter is liable to the client. The asset manager has taken appropriate measures to counter these risks, in particular by observing the principle of good faith and the principle of equal treatment when handling client orders. Furthermore, the asset manager ensures the best possible execution of client orders.

B. Risks related to financial instruments

Transactions in financial instruments are associated with opportunities and risks. The specific risks inherent in the financial instruments offered are described in the SBA brochure "Risks of Trading in Financial Instruments" (see Appendix 1). We invite clients to read this brochure carefully and remain at your disposal to answer any questions.

C. Managing conflicts of interest

a. In general

Conflicts of interest may arise if the Company :
 

• can obtain a financial benefit for itself or avoid financial loss to customers in breach of good faith;
• has an interest in the outcome of a financial service provided to clients that is contrary to that of the clients;
• has a financial or other incentive, in the course of providing financial services, to place the interests of some clients above the interests of others;
• accepts an inducement in the form of financial or non-financial benefits or services from a third party in breach of good faith in relation to a financial service provided to the customer.

Conflicts of interest may arise in connection with the financial services provided by the Company. They arise in particular from the coincidence of :
 

• several client orders;
• client orders involving the Company's own business or other proprietary interests; or
• client orders with the transactions of the asset manager's employees.

In order to identify conflicts of interest and to avoid them having a negative effect on the client, the Society has issued internal guidelines and taken organisational precautions:
 

• The Company has established an independent control function that continuously monitors the investments and transactions of the Company's employees as well as compliance with the rules of market conduct. Through effective control and sanction measures, the Company can avoid conflicts of interest.
• When executing orders, the Company respects the principle of priority, i.e. all orders are immediately recorded in the chronological order of their receipt.
• The Company requires its employees to disclose mandates that may lead to a conflict of interest.
• The Company designs its remuneration policy in such a way that it does not create incentives for behaviour that violates its contractual duties.
• The Company regularly trains its employees and ensures that they have the necessary specialist knowledge.
• The Company consults with and obtains approval from the control function in the event of a potential conflict of interest.

In the context of the financial services offered, the Company has identified conflicts of interest and informs its clients in a transparent manner:
 

• Remuneration received from third parties ( infra letter b.).
• The investment of client assets in structured products, certificates and/or collective investment funds in which the Company assumes specific tasks, paid for in addition to the asset management mandate.

No other conflicts of interest have been identified by the Company.

b. Economic links with third parties in relation to the proposed service

As a matter of principle, the Company may not receive remuneration from third parties (commissions, retrocessions, rebates or any other benefits) in connection with the financial services provided. The Company informs its clients in the mandates of the rates of such remuneration.  In all circumstances, the Company shall ensure that the client's interests are protected, particularly in the event of conflicts of interest.
 

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Information memorandum issued by the Company dated 01.03.2023.