Migros Bank pays the so-called buyback to about 37,000 customers with its own money totaling about 60 million francs. The payment will be charged to the reserves in the 2021 fiscal year. The institute announced, on Wednesday, that its annual profit will not be affected.
With this step, a mistake from the past, which was found in the course of an internal audit, will be corrected, she said.
This relates to Bank Migros’ custody contracts, which were last renewed in 2014. In these, the bank’s funds are referred to as repurchase-free, although this is often not the case: return transactions are commissions flowing in, for example Example, from a bank to an asset manager who sold the bank’s investment products to its clients.
Refunds will be made in January 2022
In the case of its own funds, Bank Migros has commissioned an external cooperating partner as a fund management company, but it provides the basic services itself. To cover such services, Migros Bank is compensated by the fund management company at a fixed rate. This compensation also includes a buyback component for certain categories of funds.
Transaction returns are now transferred to the respective clients, calculated retrospectively. The bank wants to repay them 40 percent of the fund management fee paid. This corresponds to repurchases that Bank Migros grants to third parties or collects from other fund providers. Balances will be transferred automatically in January 2022.
In addition, re-transactions of Migros Bank funds in the existing client assignment are now included in the updated guardianship contracts. In addition, the exemption will also include exchange-traded funds (ETFs) in the future, although these generally remain free of repurchases. (SDA/KOH)
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