Language in banking documentation and information duties

The client agreement in Italian

A private bank in Lugano opens an account with a set of documents that varies little from bank to bank. It comprises an account opening form, general terms and conditions, a custody regulation and a declaration of the beneficial owner on the form prescribed by the Swiss banks' code of conduct on due diligence (CDB 20). Tax declarations for the automatic exchange of information and an investment profile follow, together with an asset management or advisory agreement and a pledge agreement for a Lombard credit where applicable. For an Italian-speaking client these documents are normally available in Italian. The Swiss Bankers Association publishes CDB 20, together with its forms A, I, K, S and T for the beneficial owner and the controlling persons, in German, French, Italian and English.¹ Most banks with headquarters outside Ticino draft their documentation in German or French and have it translated into Italian, while the Ticinese banks draft in Italian from the outset.

The general terms usually contain a language clause. Typically they provide that the bank's documentation exists in several languages, that the client chooses the language of correspondence and that, in case of divergence, the version in a designated language prevails. Some banks designate the German original, others the version chosen by the client. The first solution protects the bank against translation errors, while the second protects the client and corresponds better to the principle that ambiguous standard terms are construed against their author. A bank that designates the German text as prevailing for an Italian client who reads no German exposes itself to the argument that the client could not understand the decisive version and that the bank cannot rely on terms that the client had no reasonable opportunity to know. Swiss courts apply the rules on the incorporation of general terms, including the unusualness rule, which protects a weaker or inexperienced party against unusual clauses he could not expect.² For this reason many Lugano banks designate the Italian version as binding for Italian-speaking clients.

Information duties and the client's language under FinSA

The Financial Services Act, in force since 1 January 2020, obliges financial service providers to inform their clients before concluding a contract or providing a service. Under Art. 9(1) FinSA the information must be given "prima della conclusione del contratto o prima della fornitura del servizio", and under Art. 9(3) it may be provided "in forma standardizzata, in versione cartacea o elettronica".³ The Act does not contain a general rule on the language of information. The Financial Services Ordinance contains one specific rule for the key information document. Under Art. 89 FinSO the document must be drawn up "a. in una lingua ufficiale; b. in inglese; o c. nella lingua di corrispondenza del cliente privato" (in an official language, in English or in the retail client's language of correspondence).⁴ An Italian retail client of a Lugano bank may therefore receive a key information document in Italian, as an official language and as his language of correspondence, but also in English or German. The Ordinance gives him no right to an Italian version.

The absence of a general language rule does not mean that language is irrelevant to the information duties. Information that a client cannot understand does not fulfil its purpose, and in a dispute a court may ask whether the client was in fact informed. Under Art. 72 FinSA clients have the right to receive at any time a copy of their file and of all documents concerning them that the provider has prepared in the context of the business relationship.⁵ Such a file, prepared in German by a compliance department in Zurich for a client in Lugano who reads only Italian, can become evidence against the bank. Prudent practice therefore aligns the language of the documentation, of the suitability and appropriateness records and of the correspondence with the client's language of correspondence. The cost of translation is modest compared with the litigation risk.

Notes

1. Swiss Bankers Association, "CDB 20: Revised code of conduct in the area of the fight against money laundering", https://www.swissbanking.ch/en/news-and-positions/news/cdb-20-revised-code-of-conduct-in-the-area-of-the-fight-against-money-laundering ("The CDB 20 is published in German, French Italian and English"); Swiss Bankers Association, Agreement on the Swiss banks' code of conduct with regard to the exercise of due diligence (CDB 20), Art. 69(1) (in force on 1 January 2020) and forms A, I, K, S and T, https://www.swissbanking.ch/_Resources/Persistent/6/2/e/e/62eec3df0685e359c5a376dfca79dec8b90 8ea9c/SBA_Agreement_CDB_2020_EN.pdf. ↩
2. On the incorporation of general terms and the unusualness rule (regola dell'insolito) see the case law of the Federal Supreme Court since BGE 109 II 452 and BGE 119 II 443. ↩
3. FinSA, Art. 9(1) and (3), Italian text at https://www.droit-bilingue.ch/en-it/9/95/950.1-9-12.html. ↩
4. Ordinance of 6 November 2019 on Financial Services (Financial Services Ordinance, FinSO), SR 950.11, Art. 89, Italian text (Ordinanza sui servizi finanziari, OSerFi), https://www.droit-bilingue.ch/en-it/9/95/950.11-89-92.html. ↩
5. FinSA, Art. 72, Italian text at https://www.droit-bilingue.ch/en-it/9/95/950.1-72-75.html. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.