FAQ – Frequently Asked Questions
What is the role of the FinSA Ombudsman Office and its legal mandate ?
In addition to mediation (Art. 75 FinSA), a mediation body recognised by the FDF publishes an annual activity report (Art. 86 FinSA), decides on the admission or exclusion of a company (art. 82 FinSA), informs and exchanges information within the framework of market supervision (Art. 83 and 88 FinSA).
As usual, Swiss law remains faithful to a regulation by principles. In order to interpret the provisions of the FinSA or to understand the role of the Ombudsman Office and its legal mandate, it is necessary to read the World Bank’s 2012 report on mediation in the financial sector, which is a main basis of the Swiss regulation.
Who funds the mediation body and the proceedings ?
The financing of a basic infrastructure necessary to manage the affiliations and the information duty of the mediation body (Art. 83 FinSA), regardless of the number of proceedings, is shared collectively by the affiliated companies while respecting the principle of causality (art. 80 FinSA).
Each company also finances procedures that concern it. According to art. 75 FinSA, the mediation procedure must be inexpensive or even free of charge for the client. It should also be cheaper than legal proceedings for the company.
FINSOM applies these principles to both Commercial Mediation and Workplace Mediation.
Is there a litigation costs fund ?
The reverse onus, the litigation costs fund and the arbitral tribunal, which were highly controversial instruments in the consultation, were abandoned, the last two in favour of more moderate fee regulation. The rule on the collective application of the law (group settlement procedure and class action) should not be limited to financial service providers, which is why it is being considered as part of the implementation of 13.3931 (Birrer-Heimo) by Parliament. On the other hand, the mediation bodies are being strengthened. According to the FinSA, all providers must also join a mediation body that already exists or is to be created.
Why is FINSOM's FinSA procedure free for clients ?
By law, the mediation procedure must be inexpensive or even free of charge for the client. This leaves the choice to the mediation bodies to charge a symbolic contribution to the client or not.
The main purpose of a financial contribution from the client would be to prevent abusive requests for mediation. FINSOM refrains from fixing a financial contribution to the client for the following reasons, among others:
- Such fees can discourage clients from using the mediation body, which is not the aim of the law.
- The law sets sufficient conditions to avoid abusive complaints or requests for mediation by clients.
Is FINSOM's annual base tax a trap?
No, FINSOM’s annual base tax is not a trap.
It serves to cover the costs of affiliations while at the same time trying to contribute to the setting of fair standards between branches and companies. Procedural fees serve to cover the costs of mediation procedures.
In setting its annual base tax, among other things, FINSOM has taken into account :
- The fees of the Banking Ombudsman in 2019, i.e. the mediation body of the Swiss Bankers Association (SBA), whose annual basic fee is also “approx. CHF 34” per employee. A bank with 10 employees contributes approx. CHF 340 per year for its affiliation.
- The low rate of complaints concerning financial services in Switzerland.
- The work carried out by FINMA, the supervisory bodies and the registers of advisers.
- Low operating costs thanks to FINSOM’s domicile, tax exemption and efficient organisation.
- The principle of causality and proportionality.
- Its public interest status.
FINSOM’s annual base tax is within the standards of the mediation bodies recognised by the Federal Department of Finance (FDF).
Does FINSOM give discounts ?
Yes but according to the principle of causality and FINSOM’s discounts are transparent. FINSOM also does not engage in commercial activities.
Compared to a flat-rate system, the discounts are already included in the method of calculating the annual base tax and take into account the risk of causality.
FINSOM does not grant discounts for bringing in affiliations or procedures, or membership in a particular group, association or SRO, which are not causal criteria.