Client Information in accordance with the Financial Services Act (FIDLEG)

Notice
For the sake of better readability, this text refrains from using multiple gender forms simultaneously. All personal designations apply equally to all gender identities. Unless explicitly stated otherwise, all genders are included.

1. General
These client information notes are in accordance with the Financial Services Act (Swiss Federal Act of 15 June 2018, on Financial Services, FIDLEG, SR 950.1). Sound Capital AG, acting as an asset manager under FIDLEG (hereinafter referred to as the "Asset Manager"), fulfills its information obligations under FIDLEG.
Clients are specifically informed about client classification, the financial services offered and associated risks, the best execution of financial services, handling conflicts of interest, avoiding dormancy, and initiating a mediation procedure before the Ombudsman.
The client information in accordance with FIDLEG, which does not constitute advertising for the Asset Manager's financial services, may be subject to changes from time to time. The most current version can be found on the Asset Manager's website at https://www.sound.capital or obtained physically from one of the Asset Manager's business addresses.
Information regarding costs and fees for the offered financial services will be provided to the client in the relevant appendix to the financial services agreement entered into between the client and the Asset Manager.
General information on the risks typically associated with financial instruments can be found in the brochure "Risks Involved in Trading Financial Instruments" by the Swiss Bankers Association.

2. Information about the Asset Manager
Sound Capital AG ("SoundCapital") is a leading independent asset manager with offices in Zurich, Basel and Kreuzlingen, Switzerland.

Zurich (Headquarters)
Claridenstrasse 19
P.O. Box
8022 Zurich, Switzerland
Telephone: +41 44 206 25 25
Email: hello@sound.capital

Basel
Centralbahnstrasse 7
P.O. Box
4002 Basel, Switzerland
Telephone: +41 61 425 90 80
Email: hello@sound.capital

Kreuzlingen
Hauptstrasse 16
P.O. Box
8280 Kreuzlingen, Switzerland
Telephone: +41 44 206 25 32
Email: hello@sound.capital

We are available for any questions or additional information.

3. Scope of Services
The Asset Manager primarily offers the following financial services under FIDLEG: asset management, investment advice, execution-only, and investment controlling. In addition, the Asset Manager provides other wealth management consulting services.

4. Regulatory Status, Competent Authority, and Supervisory Organization
As a financial institution, the Asset Manager holds a license to perform commercial asset management activities issued by the Swiss Financial Market Supervisory Authority (FINMA).

Swiss Financial Market Supervisory Authority FINMA
Laupenstrasse 27
3003 Bern, Switzerland
Telephone: +41 31 327 91 00
Email: info@finma.ch
Website: https://www.finma.ch

The Asset Manager is also supervised by the supervisory organization AOOS – Swiss Supervisory Company Ltd.

AOOS – Swiss Supervisory Company Ltd
Clausiusstrasse 50
8006 Zurich, Switzerland
Telephone: +41 44 215 98 98
Email: info@aoos.ch
Website: https://www.aoos.ch

5. Ombudsman
Customer satisfaction with our services is our top priority. Should the Asset Manager reject a legal claim made by a client, the client may initiate a mediation procedure before the Ombudsman. The client can contact:

OFS Ombud Finance Switzerland
10 rue du Conseil-Général
1205 Geneva, Switzerland
Telephone: +41 22 808 04 51
Email: contact@ombudfinance.ch

6. Information About the Financial Services Offered by the Asset Manager

6.1 Discretionary Asset Management
In discretionary asset management, the Asset Manager manages assets on behalf and at the risk of the client, which the client has deposited with a custodian bank. The Asset Manager executes transactions at its discretion without consulting the client. In doing so, the Asset Manager ensures that the transactions it carries out are aligned with the client's financial situation and investment goals, as well as the investment strategy agreed upon with the client, and ensures that the portfolio structure is suitable for the client.
In asset management, the client has the right to manage the assets in their portfolio. The Asset Manager carefully selects the investments to be included in the portfolio based on the considered market offering ("Investment Universe"). The Asset Manager ensures an appropriate risk distribution to the extent that the investment strategy allows. The Asset Manager regularly monitors the managed assets and ensures that the investments are consistent with the investment strategy agreed upon in the investment profile and are suitable for the client.
The Asset Manager regularly informs the client about the agreed and provided asset management services.

6.2 Comprehensive Investment Advice
In comprehensive investment advice, the Asset Manager advises the client on transactions involving financial instruments, taking into account the client's portfolio. For this purpose, the Asset Manager ensures that the recommended transactions are consistent with the client's financial situation, investment goals (suitability test), and the client's needs or the agreed investment strategy. The client then independently decides to what extent they will follow the Asset Manager's recommendations.
In comprehensive advice, the client is entitled to personalized investment recommendations tailored to their needs. Comprehensive investment advice relates to financial instruments within the Investment Universe. In doing so, the Asset Manager advises the client to the best of its knowledge and with the same care it would apply in its own matters.
If contractually agreed, the Asset Manager regularly checks whether the portfolio structure for comprehensive investment advice corresponds to the agreed investment strategy. If it is determined that a deviation from the agreed percentage structure exists, the Asset Manager will recommend corrective measures to the client.
The Asset Manager regularly informs the client about the agreed and provided investment advice.

6.3 Transaction-related Investment Advice
In the context of transaction-related investment advice, the Asset Manager advises the client on individual transactions involving financial instruments without considering the client's portfolio. The Asset Manager considers the client's knowledge and experience (appropriateness) as well as their needs and provides the client with personal recommendations for buying, selling, or holding financial instruments based on this. The client independently decides to what extent they will follow the Asset Manager's recommendations. The client remains responsible for structuring their own portfolio. The Asset Manager does not examine the composition of the portfolio or whether a financial instrument is suitable for the client, i.e., whether it aligns with the client's investment objectives and financial situation.

6.4 Execution Only
Execution-only refers to financial services that involve the mere transmission of client orders by the Asset Manager without any advice or management. In the case of execution-only, orders are initiated solely by the client and transmitted by the Asset Manager. The Asset Manager does not verify whether the proposed transaction corresponds to the client's knowledge and experience (appropriateness) or their financial situation and investment objectives (suitability). In connection with future orders from the client, the Asset Manager will not remind the client that no appropriateness or suitability assessment will be carried out.
The Asset Manager has the duty to transmit executed orders with the same care they apply to their own affairs. The Asset Manager promptly informs the client of any significant circumstances that could affect the proper processing of the order.

6.5 Investment Universe
The market offerings considered when selecting financial instruments include only third-party, i.e., not self-managed, financial instruments. As part of the financial services offered, the Asset Manager takes into account all types of financial instruments from various providers or issuers.

6.6 Appropriateness and Suitability Assessment
In the case of discretionary asset management and comprehensive investment advice, the Asset Manager is legally obliged to consider whether the recommended services and financial instruments are suitable for the client. Therefore, the Asset Manager must gather various information from the client. This includes, where relevant, details about:

The client's knowledge and experience in investment activities, including: information on the types of services, transactions, and financial instruments the client is familiar with, as well as the nature, scope, and frequency of the client's transactions with financial instruments; also, educational background, profession, and past professional activities.
The client's investment objectives, including: information on the intended purpose of the investment, the investment horizon, risk tolerance, and any investment restrictions.
The client's financial situation, including: information on the type and amount of regular income, total assets including liquid assets and real estate, current and future financial obligations, and the ability to bear losses.

Only by collecting this information can the Asset Manager recommend suitable financial transactions to the client or propose a suitable investment strategy in the context of asset management or comprehensive investment advice. The Asset Manager considers only services and financial instruments as suitable that:

Align with the client's investment objectives and personal circumstances;
Carry investment risks that the client can financially bear;
Carry risks that the client is capable of understanding based on their knowledge and experience.

If a client is classified as a professional client, the Asset Manager assumes that the client has the necessary knowledge and experience in handling financial instruments.
In the case of transaction-related investment advice, the Asset Manager will only assess whether a client can understand a financial instrument and its associated risks before a specific order is executed (appropriateness assessment). This assessment is based on the information about knowledge and experience provided by the client. If the Asset Manager deems a specific financial instrument to be unsuitable for the client based on the appropriateness assessment, they will inform the client.
To assess the appropriateness of a transaction, the Asset Manager evaluates the knowledge and experience of the person placing the order. This may be the client, an authorized representative, or a signatory of a legal entity.
In the case of execution-only services, regardless of client classification, the Asset Manager does not assess whether the relevant transaction is appropriate given the client's experience and knowledge.

6.7 Risks Associated with Financial Services
Depending on the type of financial service, the following risks, which are within the client’s sphere of risk and must be borne by the client, generally apply:

Risk of the chosen investment strategy: The client's chosen and agreed investment strategy may involve different risks (see below). The client fully bears these risks. A presentation of the risks and a corresponding risk briefing take place before agreeing on the investment strategy.
Capital preservation risk or the risk that the financial instruments in the portfolio lose value: This risk, which can vary depending on the financial instrument, is fully borne by the client. For general risks of individual financial instruments, refer to the brochure "Risks Involved in Trading Financial Instruments" by the Swiss Bankers Association.
Information risk on the part of the Asset Manager, or the risk that the asset manager lacks sufficient information to make an informed investment decision or to provide a suitable or appropriate recommendation: If the client provides insufficient or incorrect information to the asset manager regarding their financial situation and/or investment objectives and/or their knowledge, experience, and/or needs, there is a risk that the Asset Manager cannot make suitable investment decisions for the client or that the Asset Manager cannot provide appropriate or suitable advice.
Risk as a qualified investor in collective investment schemes: Clients who utilize services in the context of a long-term asset management relationship or a long-term investment advisory relationship are considered qualified investors under the Collective Investment Schemes Act (Swiss Federal Act of 23 June 2006 on Collective Investment Schemes, CISA, SR 951.31). Qualified investors have access to forms of collective investment schemes that are available only to them. This status allows for the consideration of a broader range of financial instruments in portfolio structuring. Collective investment schemes for qualified investors may be exempt from regulatory requirements. As a result, such financial instruments may not or only partially be subject to Swiss regulations, which can pose risks, particularly in terms of liquidity, investment strategy, or transparency. Detailed information on the risk profile of a specific collective investment scheme can be found in the constitutive documents of the financial instrument as well as, if applicable, the key information document and prospectus.
Information risk on the part of the client, or the risk that the client lacks sufficient information to make an informed investment decision: The client makes their own investment decisions in the context of investment advice or execution-only services. Therefore, the client needs specialized knowledge to understand financial instruments and time to engage with the financial markets. If the client lacks the necessary knowledge and experience, there is a risk that they may invest in a financial instrument that is inappropriate for them. Insufficient or flawed financial knowledge could also lead the client to make investment decisions that do not correspond to their financial situation and/or investment objectives.
Timing risk when placing orders, or the risk that the client places a buy or sell order too late following investment advice, potentially resulting in losses: The recommendations made by the Asset Manager are based on the market data available at the time of the advice and are valid only for a short period due to market dependence.
Risk of inadequate monitoring, or the risk that the client does not or insufficiently monitors their portfolio: Before issuing an investment recommendation in the context of comprehensive investment advice, the Asset Manager reviews the composition of the portfolio, provided this is agreed upon. Outside of this investment advice, the Asset Manager at no time assumes any obligation to monitor, advise, warn, or inform regarding the quality of individual positions and/or the structuring of the portfolio. Inadequate monitoring by the client can entail various risks, such as concentration risks.

In addition, risks may arise in the provision of financial services that fall within the Asset Manager's sphere of risk and for which the Asset Manager is liable to the client. The Asset Manager has taken appropriate measures to address these risks, particularly by adhering to the principles of good faith and equal treatment when processing client orders. Furthermore, the Asset Manager ensures the best possible execution of client orders.

7. Customer Classification
The FIDLEG provides for the following classification of customers by financial service providers: retail clients, professional clients, and institutional clients. Depending on the category, investor protection differs, for example, regarding information obligations, the necessity of suitability and appropriateness assessments, as well as documentation and accountability obligations. The Asset Manager classifies its customers either as retail clients, professional clients, or institutional clients. Subject to certain conditions, the customer can change their classification (so-called "opting-in" or "opting-out"; see Section 7.4 for details).

7.1 Retail Clients
The Asset Manager treats a customer as a retail client unless the customer is informed of a different classification. Retail clients receive the highest level of investor protection. They must be comprehensively informed about product risks (for example, through basic information sheets) before services can be provided or transactions executed. The selection of available financial instruments is generally limited to products for retail clients or those explicitly approved for sale to retail clients.

7.2 Professional Clients
Professional clients are considered knowledgeable investors who, due to their expertise and experience as well as their ability to bear financial losses, receive a lower level of investor protection than retail clients.
Certain conduct rules do not apply to professional clients, such as the provision of basic information sheets. Professional clients are entitled to access a broader investment universe, including financial products intended solely for professional clients or not approved for sale to retail clients.

7.3 Institutional Clients
Institutional clients are generally regulated financial institutions such as banks and insurance companies. Due to their structure, experience, and financial resources, these clients typically require little to no protection. Accordingly, they are subject to the lowest customer protection regulations under FIDLEG.

7.4 Change of Customer Category
If a customer is not already classified as a professional client by law ("per se professional clients"), a retail client may – provided the legal requirements are met – at any time declare in writing to Asset Manager their intent to change their classification to that of a professional client ("opting-out"). The opting-out applies to the entire business relationship with the Asset Manager and cannot be made for individual services or classes of financial products.
Retail clients who have been classified as professional clients at their request through opting-out can opt back in and be reclassified as retail clients at any time by submitting a written declaration to the Asset Manager. Institutional clients can also request to be treated as professional clients.

7.5 Qualified Investor under CISA
In connection with collective investment schemes, both professional clients under FIDLEG and retail clients who have entered into an asset management or investment advisory agreement are considered qualified investors by law.

8. Data Protection
The Asset Manager is obliged to comply with the relevant provisions of the Data Protection Act (Swiss Federal Act of 25 September 2020 on Data Protection, DPA, SR 235.1). For this purpose, we refer to the current version of our Privacy Policy, which can be accessed at https://www.sound.capital or physically obtained at any of our business addresses.

9. Professional Secrecy
The Asset Manager is subject to professional secrecy according to the Financial Institutions Act (Swiss Federal Act of 15 June 2018 on Financial Institutions, FINIG, SR 954.1).

10. Conflicts of Interest
Conflicts of interest may arise when the Asset Manager:

obtains a financial advantage or avoids a financial loss at the expense of a customer by acting in bad faith;
has an interest in the outcome of a financial service provided to the customer that conflicts with that of the customer;
has a financial or other incentive to prioritize the interests of certain clients over others when providing financial services; or
receives incentives in the form of financial or non-financial benefits or services from a third party in relation to a financial service provided to the customer, thereby acting in bad faith.

Conflicts of interest may arise, in particular, in connection with:

multiple customer orders;
customer orders and the Asset Manager's own transactions or other personal interests; or
customer orders and the transactions of the asset manager’s employees.

When providing financial services, the Asset Manager may receive compensation from third parties. The Asset Manager informs its clients about the type, scope, calculation parameters, and ranges of third-party compensation it may receive in connection with providing financial services. The customer waives third-party compensation, and the Asset Manager retains it. Intermediaries who refer clients to the Asset Manager receive a share of the management fees paid by the Asset Manager.
In the course of providing services, the Asset Manager may also receive minor non-monetary benefits from third parties. These may include product or service information or documentation, promotional materials for new issues, participation in training events, hospitality, or other minor non-monetary benefits aimed at enhancing service quality.
To identify, avoid, and mitigate conflicts of interest, the Asset Manager has issued internal guidelines and implemented organizational measures (e.g., rules on the acceptance of gifts, rules on employee transactions, approval, and review processes for external mandates and secondary employment).
If the measures taken are insufficient to prevent disadvantages to customers or would involve disproportionate efforts, the Asset Manager will appropriately disclose the conflict of interest.

11. Dormant Assets
It may occur that contact with clients is lost, and assets become dormant. Such assets may ultimately be forgotten by clients and their heirs. To avoid loss of contact or dormancy, the following is recommended:

Address and Name Changes: Immediate notification of changes of residence, address, or name to the Asset Manager and the responsible custodian bank.
Special Instructions: Notify the Asset Manager and the responsible custodian bank of extended absences and any forwarding of correspondence to a third-party address, as well as availability in urgent cases during this period.
Granting of Powers of Attorney: It may be advisable to designate an authorized person whom the Asset Manager or custodian bank can contact in the event of a loss of contact.
Notifying Trusted Persons and Wills: Another way to avoid the loss of contact is to inform a trusted person about the relationship with the Asset Manager. However, the Asset Manager can only provide information to such a trusted person if authorized in writing. Furthermore, affected assets may be mentioned in a will.

The customer is responsible for ensuring that contact with the Asset Manager is maintained. In this context, the customer should also inform the Asset Manager about their expected legal successor. If the customer does not wish to provide such information, they are made aware of the risks associated with dormant assets. For this purpose, reference is made to the relevant leaflet of the Swiss Bankers Association, which contains information on dormant and contactless assets and the associated risks.

Version 1.0 | Published on 16.09.2024