Customers may be natural or legal persons or partnerships as well as other legal entities formed under foreign law (e.g. trusts). The relationship between the financial service provider and the customer may be contractual or purely factual. Customers also include persons to whom the financial services provider first offers its services and with whom it has not yet agreed to provide the service.
Following MiFID II and the existing provisions in the CISA (cf. Art. 10 CISA), FIDLEG provides for customer segmentation which distinguishes between private customers on the one hand and professional customers on the other. According to FIDLEG, institutional clients are regarded as a subgroup of professional clients.
According to current practice, a professional treasury is to be affirmed if the company entrusts at least one professionally qualified person experienced in the financial sector with the permanent management of its financial resources.
The aim of customer segmentation is to combine each customer category with an appropriate level of protection. In other words, not all investors need to be equally protected from the risks of financial services. Different levels of protection are imposed due to different experiences and knowledge as well as financial circumstances of the clients. In this sense, private clients enjoy greater investor protection than professional clients, who in turn are better protected than institutional clients.
Pursuant to Art. 20 FIDLEG, the rules of conduct do not apply to transactions with institutional clients. Professional clients can explicitly waive the application of certain rules of conduct.
The financial services provider must assign its customers to the individual categories. The information provided by the client to the financial services provider is authoritative. If the financial service provider knows or suspects that the customer information is incorrect, he is obliged to ask the customer.
A subgroup of professional clients is the group of so-called institutional clients.
Institutional clients within the meaning of Art. 4 para. 3 lit. a-d and Art. 4 para. 4 FIDLEG are deemed to be institutional clients:
For the purposes of Art. 4 para. 2 FIDLEG, private customers are all customers who are not professional customers.
In order to meet specific customer needs, the FIDLEG provides for the possibility of avoiding schematic customer segmentation to a certain extent.
Wealthy private individuals can declare within the meaning of Art. 5 para. 1 FIDLEG that they do not wish to benefit from the higher level of protection afforded by the status of private customer (opting out).
Pursuant to Art. 5 para. 2 FIDLEG, private clients who (a) credibly declare that they have assets of at least CHF 500,000 and can assess the risks of a financial service on the basis of their knowledge and experience or (b) have assets of at least CHF 2,000,000 are entitled to opt-out.
Customers who, by law, are not subject to the increased level of protection of their retail customer status must be informed by the financial service provider of the possibility of opting in (Art. 5 para. 7 FIDLEG).
Opting-in is understood to mean the possibility of professional clients who are not institutional clients being able to submit to the increased level of protection of their retail client status by means of a written declaration (Art. 5 para. 5 FIDLEG).
Customer segmentation is relevant in several respects. For example, certain obligations of conduct do not apply to the provision of financial services to institutional clients (Art. 20 FIDLEG).
Specifically, when dealing with institutional clients, only the general duties to provide information, the provisions on accountability as well as the transparency and due diligence duties need to be complied with. In particular, no suitability or appropriateness test is required for financial services to institutional clients. The FIDLEG also provides certain facilities for the provision of services to professional clients, such as aptitude and appropriateness tests. In addition, customer segmentation is also important for the design of product documentation (e.g. in connection with exemptions from the prospectus requirement or the scope of application of the basic information sheet).