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Rules Governing the Particulars to be Recorded in the Contract for Recommendations by Securities Firms to Customers for Securities Trading  CH

Amended Date: 2016.05.26 
Categories: Market Supervision > Regulation of Securities Firms
1     These Rules are established pursuant to Article 2, Paragraph 4 of theOperational Regulations GoverningSecurities Firms Recommending Trades in Securities to Customers.
2     Before signing a recommendation contract with the customer, the securities firm shall first appoint a responsible associated person to explain to the customer the potential risks of securities trading andprovide a period of three days or more for the customer to review the content of all of the terms of the recommendation contract.
3     A written recommendation contract specifying the rights and obligations of both parties shall be entered into between the securities firm and the customer before the securities firm recommends a trade in securities to the customer. The main particulars to be recorded in the Contract for Recommendations by Securities Firms to Customers for Securities Trading are as follows:
  1. Names, addresses, GUI number or ID number of the securities firm and the customer.
  2. Method the securities firm uses to make recommendations to the customer.
  3. Term of the recommendation contract.
  4. Investors shall be solely responsiblefor the investment risks and profitsarising from the securities trades recommended. The securities firm shall not enter into an agreement with the customer to share the profits and losses in the securities investments.
  5. The securities firm to recommend trades in securities to a customer shall evaluate the customer's investment capability and make the recommendation in good faithwith the care and loyalty of a good administratorbased upon reasonable information.
  6. When recommendinga trade in securities to a customer, the securities firm shall not receive funds from the customer or engage in investmentin securities on behalf of the customer.
  7. The securities firm shall keep confidential any information known to the securities firm as to the customer's financial status and other personal situation when recommending a trade in securities to the customer.
  8. Without the securities firm's consent, the customer shall not disclose to others the content of the opinion or research reports provided by the securities firm.
  9. Causes or methods of changes in or termination of the recommendation contract.
  10. Agreement on dispute resolution.
  11. Names of the regulations or documents incorporated by reference in the recommendation contract.
  12. Other necessary particulars relating to the parties' rights and obligations.
  13. Date of thecontract.