Merger of UBS and Credit Suisse, and the implications for the Ninety One Global Life Portfolio and Ninety One Global Investment Portfolio
Dear Advisor,
Further to our communication of Thursday 16th March, we are pleased to share an update on Credit Suisse and their role as custodian for the above-mentioned products.
On Sunday 19th March, following the intervention of the Swiss authorities, it was announced that Credit Suisse and UBS had entered into a merger agreement, with UBS being the surviving entity. We welcome news of the merger and the certainty that this creates for investors in the Ninety One Global Life Portfolio and Ninety One Global Investment Portfolio.
As mentioned in our previous communication, clients’ investments are held in safekeeping accounts and protected by Swiss insolvency laws. The custodian is responsible for holding these assets (generally funds and securities) and ensuring their safekeeping, but the assets remain the property of the customer and do not form part of the assets of the custodian and are not affected by an insolvency event.
All custodians are required to operate a bank account, for the receipt and payment of client monies and as the settlement account of the clients’ investments when clients trade. The events of the past week have highlighted the importance of the security of these bank accounts since cash held in the custodian’s bank account could be exposed to risk of bank failure. While we had implemented a number of measures to minimise any potential exposure, we also take significant comfort from the swift and decisive actions taken by the authorities to protect and stabilise the bank. Switzerland as a jurisdiction has well established laws and regulations that protect investors so that they can have confidence that their investments are being held in a secure and well-regulated environment. It is also clear from the recent actions taken by FINMA, the Swiss government and Swiss National Bank that Switzerland is fully committed to protecting the integrity of its banking system.
Furthermore, the merger between UBS and Credit Suisse to create one of the largest banks globally, together with the Swiss regulator’s backing and various liquidity lines and government guarantees, indicates that cash held on deposit with Credit Suisse/UBS is well protected.
From an operational perspective we have been in contact with Credit Suisse to confirm that it is business as usual and that they do not expect any disruption to client services. We will keep you informed should there be any additional developments, however we do not expect any impact on current operations.
For any questions, please contact your Ninety One Sales Manager or our Client Service Centre on 0860 500 100 or +27 (0)11 508 3801.
Thank you for your continued support.
Kind regards,