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Professional Regulations (Code of Conduct)
of the Swiss Association of Asset Managers for the Practice of Independent Asset Management
(Excerpts from the regulations for the Self-Regulatory Organization of the Swiss Association of Asset Managers)

Article 1      Foreword
• With concerted effort to keep and improve the renown of the profession of Swiss independent asset managers on both the national and international levels,
• with the will to contribute effectively to the protection of investors, and
• with the intention to contribute effectively to combating money laundering,

the independent asset managers organized in the Swiss Association of Asset Managers (SAAM) are obliged vis-à-vis SAAM as the Self-Regulatory Organization entrusted with safeguarding the interests and the renown of the profession to:

a) advise the contractual partner (client) at any time as independent expert and inform him/her of any risks arising from the implementation of investment policies,
b) comply with the regulations against money laundering and safeguarding due care when conducting financial transactions laid down in the Money Laundering in the Financial Sector Act dated 10 October, 1997.

Article 2      Identification of the contractual partner (client)
The members shall be obliged to identify the contractual partner by means of a legally valid personal document upon initiation of the business relationship. In case of cash transactions with an individual not yet identified, the duty to identification is applicable only if one or more transactions appearing to be linked to one another reach a significant amount. In the event of the suspicion of money laundering, the identification process must be carried out even if the amount involved is insignificant.

Implementing regulations:

1. With natural persons, identification of the contractual partner must occur by means of a valid official personal document (passport or identity card).

2. With legal persons and firms, identification must occur by means of a certificate of registration in the commercial register or a comparable document. Copies of the documents must be stored. Comparable documents can also be copies of the
certificate of incorporation of the company, of the corporate charter, of the last audit opinion by the audit firm, or of a certificate of approval by the trade police; all documents must be certified by a notary public. The substantiating documents must be in accordance with the current legal and economic situation and must not be older than twelve months.

3. During the identification procedure, the following information must be gathered:
- Surname and first name or company name,
- Residence or corporate seat,
- Date of birth or date of foundation and place and date of listing in the commercial register, and
- Nationality.

4. Identity cards or passports must be photocopied. The photocopy is to be retained and stored. The member shall document all other important personal details of the contractual partner in writing.

5. In the event that the business relationship is initiated via written correspondence, the member must ensure that all details given are certified pursuant to subsection 3 supra or in any other comparable manner and shall request a certified copy of the passport or the identity card or of the certificate of registration in the commercial register, respectively, or of comparable documents.

In the event that the contractual party’s corporate seat is outside of Switzerland, the certification of the passport copy or of the certificate of registration with the commercial register must contain an apostille pursuant to The Hague Agreement dated 5 October, 1961, for the exemption of foreign official documents from certification. Instead of the certification and the apostille, a validation by a Swiss embassy or Swiss consulate shall also be acceptable. Furthermore, the member shall request a legally valid signature or a validation of the signature.

Article 3      Identification of the economic beneficiary
The member shall request from the contractual partner the identification on the economic beneficiary in writing so long as the economic beneficiary is not the contractual partner or in case of doubt.

In case of cash transactions of significant value pursuant to article 2 of these Professional Regulations and the connected implementing regulations, and if the contractual party is a domiciliary company, such a declaration by the contractual partner of the economic beneficiary must always be requested. In case of global accounts and collective custody accounts, the member shall request a complete list of the economic beneficiaries. The member shall require the contractual partner to report any alterations to this list immediately.

Implementing regulations:
11. In the written declaration by the contractual partner as to the economic beneficiary, the contractual party has to certify the following information with his/her signature:

• surname and first name or company name,
• private residence or corporate seat,
• date of birth or date of founding of the company and place and date of listing in the commercial register, and
• nationality.

12. The term domiciliary company comprises all those corporations, institutions, trusts, trust corporations, etc., in Switzerland and abroad, regardless of purpose, function, legal form, and corporal seat, if

• in the country of domicile no trade or manufacturing or any other type of commercial activity is carried out,
• the company has no other premises (seat with an attorney-at-law, a trust corporation, a bank, etc.), and
• no staff has been employed exclusively for the company or if the employed personnel carry out only administrative tasks (e.g. accounting tasks, correspondence upon authorization by the persons or company groups controlling the domiciliary company).

13. Legal persons and companies with their corporate seat in Switzerland, which actually pursue the interests of their members in joint self-help or mainly and actually political, religious, scientific, non-profit, or social purposes, are not considered domiciliary companies.

14. The economic beneficiary may be a natural person or a legal person who conducts a trade or manufacturing business or any other type of commercial business. A domiciliary company may not be established as an economic beneficiary.

15. With associations of persons or with pools of assets in which there is no economic beneficiary (e.g. in discretionary trusts), instead of the identification of an economic beneficiary, the contractual partner shall be required to provide a
written declaration stating these facts. Furthermore, the contractual partner shall be required to provide information on the actual (non-trust) settlors and, if definable, the persons, who have managerial authority vis-à-vis the contractual partner and his/her bodies as well as the circle of persons who could become beneficiaries (in categories, e.g., ‘family members of the settlor’). In case trustees, protectors, etc. have been appointed, they are also to be listed in the declaration.

16. In case of revocable constructions (e.g., revocable trusts), the actual settlor shall be deemed to be the economic beneficiary.

17. In the event that a member or one of his/her employees assumes the administration of a company – either as member of the advisory board or by an according power of attorney – he/she shall provide documentation of the share and control portions.

Article 9      Independence of Asset Management
The member shall practice his/her profession freely and with responsibility for his/her own actions. In his/her professional activities, the member shall stand behind his tasks as advisor of the client in any money and asset matters. The member shall always be aware of his duties and of the importance which his services can have for the economic existence of the client he/she attends to.

The members of SAAM are obliged to ensure that all persons entrusted with executing their asset management mandates shall have the required professional and personal qualifications for complying with these tasks. The members shall be obliged to ensure appropriate organization of their business activities.

Implementing regulations:
41. The independence of asset management requires that

• the client’s assets be strictly separated from the member’s assets (however, it shall be permissible to make payments to and from the client through the member’s own accounts);
• business transactions that lead to a conflict of interest for the client and the member be conducted in such a manner that there shall be no disadvantage for the client;
• the member automatically inform the client of any special risk structure of special types of business transactions whose risk potential goes beyond the normal scope of risk potential in the acquisition, disposal, and holding of stocks and bonds;
• in business transactions requiring special knowledge, an expert be consulted.

42. The asset manager’s personal responsibility shall require that the members and their employees continually receive further training in all matters concerning their professional activities through the participation in events and seminars as well as through auto-didactic studies.

43. The member shall execute the management of assets held in the capacity of a bank based on a power of attorney restricted to administrative activities.

44. In their respective companies, the members shall take the required organizational measures for the prevention of money laundering. They shall issue required company guidelines and shall ensure appropriate control systems. Members shall be obliged to ensure adequate basic training for new employees practicing financial intermediation within six months after the new employee has taken up the position. Employees practicing financial intermediation shall complete the
respective basic training within one year after their admission to the Association and shall be monitored by a qualified employee up to the completion of their basic training.

Article 10      Asset management agreement
The members shall conclude an asset management agreement with their contractual partners in written form. The said contract shall include details on scope and duration of the mandate, define the reference currency, the investment objective, the strategic investment policies, the asset allocation, and any investment restrictions, and shall describe type, periodicity, and scope of the reporting, as well as set the amount and basis of calculation for the honorarium of the asset manager for his/her services.

Article 11      Secrecy
Within the framework of the law and the Professional Regulations, the members shall be obligated to maintain absolute secrecy concerning all information given to them within the framework of their activities as asset managers.

Article 12      Illegal investment transactions
A member shall not accept any bank deposit in accordance with the Swiss Federal Banking Act for his/her clients, if and when the member does not possess certification on his/her entitlement to carry out business operations as a bank. Members shall not mix the assets they have been entrusted with by clients in nonreplaced collective assets similar to investment funds or in assembly accounts or collective custody accounts.

Article 14      Orders for the re-establishment of the proper conduct of business
Independently from any proceedings pursuant to article 15 following, the SRO Management shall be entitled to issue requirements for the re-establishment of proper conduct of business. The member shall be informed of these requirements in writing and shall regard them as binding.

     
 
 
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