On March 29 2001, the Swiss Federal Banking Commission (FBC) decided to establish specific minimum standards for the account opening and monitoring of exclusively internet-based banks and securities traders. These standards are intended to assure the quality of client identification and monitoring at internet-based banks until the revised provisions of the agreement on the Swiss Banks' Code of Conduct with regard to the exercise of due diligence (CDB 98) are presented. The specific minimal standards apply by way of a supplement to the already existing provisions concerning account opening and monitoring, which continue to be fully applicable.
The FBC notes that, even in the case of exclusively internet-based banks and securities traders, a personal visit of the client must take place in the case of "important clients" to check the client identification and the continuous monitoring of the business relationship. "Important clients" are those who bring with them assets of more than Sfr500,000 ($281,000). According to the FBC, to be able to identify these important clients on a timely basis, the following information must be requested from the new clients prior to the opening of an account:
- amount of the assets expected to be brought in;
- information on the financial situation and the professional or business activities of the client or the beneficial owner, on the origin of the assets and on the exercise of important public functions.
If, during the course of the business relationship, the assets of a client reach or exceed the threshold of Sfr500,000, or if the aggregate net flow of assets within one month reaches or exceeds Sfr500,000, a personal visit must subsequently occur within three months. In the case of account openings of domiciliary companies, the FBC requires a personal visit by the beneficial owner.
In addition, the internet banks must employ IT to also (periodically) monitor the client relationship through special monitoring software.
With respect to the application of the minimal standards to already existing client relationships, the FBC has prescribed a transitional period until September 30 2001.
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