Retrocessions case law: Swiss Federal Supreme Court timeline and consequences

Focus and scope#

This note provides an Abegglen-based timeline of key Swiss Federal Supreme Court milestones on retrocessions and summarises the legal consequences highlighted in the contribution. [Abegglen pp. 1, 9–11]

2006: the starting point — surrender duty anchored in Art. 400 CO (OR)#

Abegglen frames the modern Swiss retrocessions debate as an “evergreen” that began with the Federal Supreme Court’s application of Art. 400(1) CO, holding that third-party payments for client introduction and the intermediation of commission revenues (finders’ fees and retrocessions) must be handed over by the recipient to the principal. [Abegglen p. 1] He later refers to this first landmark retrocessions ruling as having been issued in 2006. [Abegglen p. 11] The legal consequence identified is a civil-law surrender duty for certain third-party benefits received by the service provider in connection with the mandate relationship, with the analysis turning on the “inner connection” test rather than on proof of actual misconduct or loss. [Abegglen pp. 1–2]

2011: the informed waiver standard — more than a blanket clause#

Abegglen recalls that in 2011 the Federal Supreme Court held that, in light of conflict-of-interest risks, a blanket waiver “without further details” is not sufficient. [Abegglen p. 9] For discretionary wealth management mandates, the contribution summarises the Court’s disclosure requirements for a valid waiver as including:

• disclosure of the expected retrocessions’ order of magnitude expressed as a percentage bandwidth of the managed assets, and [Abegglen p. 9]

• information about the “reference values” (“Eckwerte”) of retrocession arrangements (distribution/placement agreements) with third parties, with an additional conflict-risk warning for inexperienced investors. [Abegglen p. 9]

The legal consequence is that “waiver” becomes a structured consent mechanism: the client’s renunciation is only effective if it is informed in the sense required by the case law, and the information package is tied to the conflict-prevention rationale of Art. 400 CO. [Abegglen pp. 2, 9]

2024 (February): “Eckwerte” clarified and “industry-standard disclosure” accepted#

Abegglen presents February 2024 as a major clarification moment, with the Federal Supreme Court rejecting “overextended” demands (raised by claimant counsel) that banks must provide retrocession information for each individual fund / each individual retrocession agreement. [Abegglen p. 10] The contribution emphasises why the Court’s rejection matters: the information about retrocessions must be provided before concluding a discretionary wealth management mandate, and per-fund disclosure would be practically impossible because, ex ante, it is not known which specific funds (or share classes) will be used during a future mandate period and the approach would generate an “enormous information flood”. [Abegglen p. 10]

In the same February 2024 ruling (BGer 4A_496/2023, as cited by Abegglen), the Court clarified what it means by “Eckwerte” and accepted “industry-standard disclosure” as sufficient in the case at hand. [Abegglen p. 10] Abegglen describes the disclosure package as follows:

• percentage bandwidths of retrocessions for different fund/product categories; [Abegglen p. 10]

• an explanation of the calculation basis (investment volume) and the periodicity of payments; [Abegglen p. 9]

• for wealth management, disclosure expressed relative to the managed assets; for advisory/execution-only contexts, the absence of a managed asset base is acknowledged. [Abegglen p. 10]

The legal consequence is a more operationally workable disclosure/waiver standard: courts accept a categorised bandwidth approach aligned with market practice, rather than an unattainable line-item approach. [Abegglen p. 10]

2024 (May): relationship-sensitive approach and retroactive waivers in AGB#

Abegglen reports that in May 2024 the Federal Supreme Court further distinguished execution-only and investment advice relationships from wealth management for purposes of retrocession information, endorsing the view that wealth management concepts cannot simply be applied “without further reflection” to advisory/execution-only settings. [Abegglen p. 10] At the same time, Abegglen highlights another novelty: the Federal Supreme Court’s first explicit validation of an expressly retroactive waiver (covering “future and past” trailer fees) in general terms and conditions (AGB) as admissible. [Abegglen p. 11] The legal consequence is that the waiver doctrine is not limited to forward-looking consents; where expressly agreed, a retroactive waiver may be upheld. [Abegglen p. 11]

2024: emerging client “question obligation” (inquiry expectation)#

In Abegglen’s assessment, the 2024 jurisprudence also moves toward recognising that clients have an (at least partial) obligation to inquire: in the February 2024 decision, the Court acknowledged that the precise amount of retrocessions can also be obtained by asking the provider and that the client is entitled to request more detailed information. [Abegglen p. 11] Abegglen connects this to good-faith expectations in waiver disputes, particularly for sophisticated clients who knowingly waive without wanting to know the quantum and later challenge the waiver. [Abegglen p. 11]

Still open: execution-only surrender duty (“Gretchenfrage”)#

Despite these clarifications, Abegglen stresses that the Federal Supreme Court still has not had to decide the “Gretchenfrage” of whether a surrender duty exists in pure execution-only relationships, because the cases it decided contained waivers that were sufficient for decision. [Abegglen pp. 2, 11–12] The legal consequence is continued legal uncertainty and reliance on cantonal case law and careful contractual documentation until the Federal Supreme Court addresses the issue directly. [Abegglen pp. 2–4, 11–12]

Practical takeaway#

For practitioners, Abegglen’s timeline shows a shift from establishing the surrender principle (2006) to refining the informed waiver standard (2011) and then operationalising and differentiating that standard across relationship types (2024), while leaving the execution-only surrender question unresolved. [Abegglen pp. 1, 9–12]

References#

• Abegglen pp. 1–2

• Abegglen p. 9

• Abegglen p. 10

• Abegglen pp. 10–11

• Abegglen pp. 11–12

Regulatory notice#

This publication is provided for information purposes only and does not constitute legal, tax or investment advice. It is not an offer, solicitation or recommendation. It is directed solely at qualified investors in Switzerland and is not intended for U.S. persons.