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2019Annual Report

CreditsPublisher Deposit Guarantee and Investor Compensation Foundation PCC (EAS)Austrasse 46LI-9490 Vaduz+423 230 15 [email protected]

Designfoxcom AG, Vaduz

The EAS Annual Report is published electronically (PDF file) in German and English.The German version is authoritative.

EAS – Annual Report 2019 | 1

Table of contents

1. Foreword 2

2. Facts & Figures 2019 3

3. Organisation 43.1 Legal form & purpose 43.2 Structure / set-up 53.3 Bodies 6

4. Projects 74.1 Compensation process & structured depositor data (SCV file) 74.2 Deposit guarantee fund & risk-based calculation of contributions 74.3 Flyer on deposit protection & uniform information sheet for depositors 7

5. Network 95.1 European Banking Authority (EBA) 95.2 European Forum of Deposit Insurers (EFDI) 95.3 International Association of Deposit Insurers (IADI) 105.4 National associations and authorities 10

6. Cells 116.1 Overview 116.2 Cell Banks 126.3 Cells for other service providers 136.4 Participant statistics 14

7. 2019AnnualFinancialStatement 157.1 Information on the annual financial statement 157.2 Foundation: Balance sheet, income statement and notes 167.3 Cell Reporting 19

8. AuditReport 20

2 | EAS – Annual Report 2019

DearReaders

In June 2019, Liechtenstein's newly created Deposit Guarantee and Investor Compensation Act (EAG) en-tered into force, implementing EU Directive 2014/49/EU on Deposit Guarantee Schemes (DGSD II). The EAG provides Liechtenstein with an internationally recog-nised and modern deposit guarantee scheme. The strengthening of the scheme's financial resources with a combined financing system, the further reduction of the payout delay from 20 to seven days, and the in-creased information requirements on the part of the deposit guarantee scheme create additional confidence among depositors.

At the end of 2019, the volume of covered deposits at the affiliated banks amounted to CHF 4.9 bil-lion, a decline of CHF 0.5 billion from the previous year. Covered investor claims amounted as in the previ-ous year to CHF 1.3 billion. The number of financial ser-vice providers affiliated with EAS remains stable at 130 participants.

As a non-profit institution, operations are financed by fees contributed by the participants. These fees are to be kept as stable as possible. Fortunately, the off pro-ject costs incurred in the reporting year fell within EAS's budget planning and were covered by existing reserves. For the first time, ex ante contributions were also col-lected from banks for the pre-funding of guarantee cas-es. The target level of the cell's deposit guarantee fund is CHF 27 million, which is to be reached within ten years. Further information can be found under Cells (Chapter 6) and Annual Financial Statement (Chapter 7).

EAS is continuously reviewing ways to optimise its capa-bilities as a protection scheme for banks and other financial service providers. The compensation process of the deposit guarantee scheme was strengthened and expanded in the reporting year with the support of an external service provider. Building on this, simulations and stress tests are regularly carried out together with

the banks and other stakeholders. The aims of these stress tests include improving the data basis on deposi-tors and to ensure and optimise the operational and financial capabilities for a crisis situation within the financial safety net.

In addition to the traditionally stable banking centre with above-average capital adequacy and liquidity ra-tios and the modern resolution regime for larger banks of public interest, the Liechtenstein financial centre has created very good conditions for clients and creditors by offering an advanced deposit guarantee scheme as the third pillar of financial stability, ensuring an active response even in crisis situations. Initial findings from

the COVID-19 pandemic show that Liechtenstein banks have been able to assume their responsibility at all times, both strategically and operationally, while com-plying with standard supervisory requirements.

We hope that when reading this newly designed Annual Report 2019, you will find interesting insights into our protection scheme for banking and investment clients of Liechtenstein financial service providers.

Siegbert Näscher, President Rafik Yezza, Managing Director

1. Foreword

"Regularly carrying out simulations and stress tests strengthens the financial safety net."


2. Facts & Figures 2019

127 participants• 13 banks• 106 asset managers• 8 management companies / AIFMs

Maximum compensation• Depositors CHF 100,000.00• Investors CHF 30,000.00

No compensationcases

Covered Deposits• CHF 4.9 billions

Covered investor claims• CHF 1.3 billions


3. Organisation

3.1 Legalform&purposeThe Deposit Guarantee and Investor Compensation Foundation PCC (EAS) is an autonomous foundation un-der articles 552 et seq. of the Liechtenstein Persons and Companies Act (PGR), entered in the Commercial Regis-ter since 6 September 2001. It is set up in the form of a protected cell company (PCC) in accordance with arti-cles 243 et seq. PGR. The transformation into a protect-ed cell company was completed on 1 April 2015. The founder is the Liechtenstein Bankers Association (LBA).

Together with the cell participants, the foundation con-stitutes a statutory protection organisation according to article 4 (1) of the Liechtenstein Deposit Guarantee and Investor Compensation Act (EAG) and in accord-ance with the statutory provisions and its articles of as-sociation, its purpose is to guarantee covered deposits and to compensate covered investor claims at the banks and other financial service providers participat-ing in the protection scheme.

The foundation is established for an indefinite period of time and organised under private law. It does not oper-ate a commercial business (article 552 (1) PGR) and is non-profit. The fees collected are used to cover opera-tional and administrative costs. Because of its non-prof-it purpose, EAS is exempt from corporate income tax under article 45 (2) of the Tax Act.

The current legal framework such as EU directives, the Liechtenstein Act and Ordinance, and the EAS articles of association can be found on the EAS website at www.eas-liechtenstein.li.

Since 2010, EAS has been a member of the European Forum of Deposit Insurers (EFDI), headquartered in Brussels, and of the International Association of Depos-it Insurers (IADI), headquartered in Basel. IADI is affiliat-ed with the Bank for International Settlements (BIS) and is the global standard-setter in the field of deposit in-surance, while EFDI as an expert for deposit insurance and investor compensation mainly focuses on the Euro-pean Single Market.

https://www.eas-liechtenstein.li/en/participants/about-us/legal-framework


LBA (Founder)

Foundation Board

DepositGuaranteeandInvestorCompensationFoundationPCC

Core of the Foundation

Banks Investment Firms Asset Managers Management Comp./AIFMs

Cells

Auditor

Secretariat

3.2 Structure/set-upThe foundation is a protection institution for covered deposits and investor claims of clients against banks and other financial service providers domiciled in Liech-tenstein. It has assumed the obligation to compensate the clients of a bank or other financial service provider up to a certain maximum amount (coverage amount) in the event of default or bankruptcy, if that bank or other financial service provider has a pre-existing contractual relationship with the foundation. With this purpose, EAS as the sole protection institution in Liechtenstein contributes substantially to the protection of creditors and makes a crucial contribution to the reputation and stability of the Liechtenstein financial centre. For this purpose, it operates a combined protection scheme for deposits and investor claims in accordance with the le-gal and European requirements.

The foundation is composed of a core and the following four cells:

1. Banks2. Investment firms3. Asset managers4. UCITS management companies and AIFMs

The core of the foundation is responsible for ongoing operations, namely management of the foundation and administrative processing of compensation cases on behalf of the cells. The core of the foundation has the core assets at its disposal.

Within an individual, separated, and independent cell, assets are accumulated through the contributions of the participating financial service providers. These as-sets serve to finance compensation cases. They are ex-plicitly and exclusively allocated to each cell. The indi-vidual cells do not have their own legal personality, but are managed and accounted separately.

Each cell are liable only for themselves, i.e., liability does not extend between cells. The core assets assume liability for the core. For an individual cell the specifical-ly allocated cell assets are liable.


3.3 Bodies

3.3.1FoundationBoardThe Foundation Board is the governing body of the foundation, comprised of three to seven natural per-sons as members, who are appointed by the founder for an indefinite term and may be dismissed by the founder. It is the Foundation Board's responsibility to manage the foundation and to represent it externally.

At most two seats on the Foundation Board are allocat-ed to the Association of Independent Asset Managers in Liechtenstein (VuVL) and the Liechtenstein Invest-ment Fund Association (LAFV), which represent the participants in the pure investor compensation scheme of EAS in particular. The remaining members of the Foundation Board are representatives of the LBA mem-ber banks.

SiegbertNäscherPresident, VP Bank AG, member since March 2012ChristophReich Vice President, Liechtensteinische Landesbank AG (LLB), member since March 2012RolandFrick Bank Frick & Co. AG, member since October 2015Lars InderwildiLiechtenstein Investment Fund Association (LAFV), member till June 2020DavidGamperLiechtenstein Investment Fund Association (LAFV), member since June 2020FredyWolfinger Association of Independent Asset Managers in Liechtenstein (VuVL), member since October 2015ClaudiaJehle-Ospelt NEUE BANK AG, member since October 2016Ivo Klein LGT Bank AG, member since March 2017

3.3.2AuditorBased on Art. 25 (7) EAG the foundation appoints an auditor licensed under Liechtenstein banking law (arti-cle 37 Banking Act), which performs an annual legality and regularity audit of the protection scheme and pre-pares a detailed audit report.

PricewaterhouseCoopersAGsince 2001 fiscal year

3.3.3SecretariatAccording to the articles of association, the Foundation Board may establish a Secretariat reporting to it in or-der to fulfil its responsibilities. By way of a written agreement, the LBA has been entrusted with the re-sponsibilities of ongoing management and especially with the processing of compensation cases. On the ba-sis of this agreement, the management of the EAS Sec-retariat has been assigned to the LBA Secretariat, which in particular is responsible for all daily business, inter-national cooperation and administrative concerns of EAS.

RafikYezza Director

SilviaHeron Administration

Katharina Zogg Accounting / Annual Financial Statement


4. Projects

This chapter provides information on the main work and projects of EAS, which, in addition to ongoing ad-ministration of the foundation, were the main focus of the Secretariat's activities in the past year.

4.1 Compensationprocess&structured depositordata(SCVfile)One of the core objectives of the new deposit guarantee regulation is to reduce the payout delay from currently 20 to seven working days (from 2026). This reduction poses additional operational challenges for any deposit guarantee scheme. To meet this requirement, the effec-tiveness and efficiency of existing processes and systems had to be comprehensively reviewed. New approaches had to be identified. The result of this analysis led to the decision to enter into a cooperation agreement with an external partner.

In order to fully utilise all process optimisation and automation potential, the existing requirements on the SCV file had to be com-prehensively adapted ex-panded. Following intensive collaboration between the banks, EAS, and the cooperation partner (onboarding phase), initial tests based on the new requirements were carried out in the reporting year. The aim is to complete the onboarding phase by the end of March 2020 and thus to achieve operational readiness. EAS will examine the quality of the SCV file each year as part of the stress tests – for the first time in 2020 – using an automated analysis and reporting procedure. This means that a ma-jor subproject for implementing the new requirements has been successfully completed and integrated into reg-ular operations.

4.2 Depositguaranteefund&risk-based calculationofcontributionsThe risk-based method for calculating contributions, which was already defined in the previous year, was sub-mitted to the Financial Market Authority (FMA) Liechten-stein for approval in the reporting year and confirmed at the beginning of September 2019. Further information is presented in Chapter 6.2.

In parallel, software was developed together with an ex-ternal partner to calculate the individual contributions in accordance with the approved method and to assist the calculation and invoicing process, and its methodology was confirmed by an external auditor. Using the approved contribution calculation method and with the support of the calculation software, contributions for the newly es-tablished deposit guarantee fund were invoiced as planned for the first time at the end of September 2019.

At the same time, this allowed us to validate the envis-aged process steps and build up operational experience.

In connection with the first invoicing of contributions to the deposit guarantee fund, contractual and operational preparations for the optional use of irrevocable payment commitments1 were completed as planned with an ex-ternal central securities depository in October 2019.

4.3 Flyerondepositprotection&uniform informationsheetfordepositorsIn addition to its legal obligation to provide information about the deposit guarantee scheme on its website, EAS wants to further promote knowledge about the de-posit guarantee scheme among clients and other inter-ested groups. For that purpose, a separate information The flyer, which has been available since March 2020, can be used by banks for their client communication. Supplementing the information on the EAS website, it

"The expanded SCV standard is able to fully utilise all process optimisation and automation potential."

1 EBA Guidelines on payment commitments under Directive 2014/49/EU on deposit guarantee schemes (EBA/GL/2015/09)


provides a simple and brief descripti on of EAS and the objecti ves and functi oning of the deposit guarantee scheme.

Following introducti on of the EAG, banks are now legal-ly obliged to provide depositors with an informati on sheet on the deposit guarantee scheme before opening an account for the fi rst ti me. It was important to EAS that all affi liated banks and their clients receive the same informati on, and so it has provided a template for a uniform informati on sheet for depositors in four lan-guages (German/English/French/Italian). These tem-plates can be found on the EAS website.

Informati on to clients of Liechtenstein Banks

Deposit Protecti on

Please click here to read the informati on on deposit protecti on.

https://www.eas-liechtenstein.li/files/eas/upload/Dokumente/EAS_leaflet_deposit%20protection_E_April%202020_online.pdf


5.1 EuropeanBankingAuthority(EBA)The EBA was mandated by the European Commission to prepare a progress report on the implementation and effectiveness of the existing provisions of the direc-tive and to identify potential for optimisation. For this purpose, it set up a task force with representatives of European supervisory authorities and deposit guaran-tee schemes at the end of 2018.

Taking into account the provisions of the EU directive and the specific mandate of the Commission, the anal-ysis was structured according to the following areas:

a) Payoutb) Funding and uses of fundsc) Eligibility, coverage level and cooperation between

deposit guarantee schemes

At the invitation of the EBA and in coordination with the FMA, EAS was able to actively contribute its practical experience through surveys and task force activities.

The EBA has meanwhile published three opinions2 con-taining numerous recommendations that the Commis-sion should consider when drafting a report on imple-mentation of EU Directive 2014/49/EU and a proposal for a recast directive. EAS expects the activities un-dertaken to optimise the rules governing deposit guarantee schemes on the ba-sis of the three opinions to be ongoing, and that EAS will continue to participate actively in the design of the new regulatory framework.

5.2 EuropeanForumofDepositInsurers (EFDI)EAS has been an active member of EFDI for about ten years now and participates in various committees and working groups, in particular with respect to specific is-sues involving the implementation of European deposit guarantee and investor compensation rules. The forum also serves as a platform for the exchange of experi-ence in payout cases and for mutual support and coop-eration on all practical issues.

The results of this discussion are used to examine im-plementation of EU-wide harmonised provisions on a subject-specific basis, and to summarise and publish approaches to best practice in non-binding guidance papers. At the time of this report, such implementation support has already been made available for the defini-tion of deposits, coverage level, payout, Single Custom-er View, investment policy, alternative funding, and al-ternative measures to prevent bank bankruptcy. To promote discussion on the design of risk-based contri-butions, an expert paper comparing risk-based systems was also published.

During the reporting year, EFDI set up a new FinTech working group to further analyse the impact of financial innovation, in particular the use of new technologies, on the activities of deposit guarantee and investor com-pensation schemes.

Given that the Liechtenstein financial centre has a strong strategic involvment in digitalisation and finan-cial innovation, EAS has decided to actively support the working group activities. In addition to participating in various surveys, EAS presented information on Liech-tenstein as a FinTech location and on Liechtenstein's new Blockchain Act.3

2 EBA/OP/2019/10, EBA/OP/2019/14, EBA/OP/2020/023 Law of 3 October 2019 on Tokens and TT Service Providers (TVTG)

5. Network

"At the invitation of the EBA, EAS was able to actively contribute its practical experience."


5.3 InternationalAssociationof DepositInsurers(IADI)EAS has also been a member of the international stand-ard-setter for about 10 years. Over the last few years, IADI has focused especially on its strategic reorienta-tion. The operationalisation of these strategic objec-tives requires in particular a substantial expansion of the personnel resources of its Basel secretariat. In or-der to cover the additional costs, a new fee model for IADI members was developed.

Both the strategic orienta-tion and the funding there-of led to intensive, at times heated discussions among the membership. At the Annual General Meeting on 11 October 2019, the Executive Council of IADI submit-ted both the strategic reorientation and the new fee model for approval, which did not sufficiently take ac-count of major concerns raised by EAS and other pro-tection schemes. Consequently, EAS was unable to ap-prove the proposals. In the end, both proposals were accepted by a very narrow margin.

Following the formal confirmation of the General Meet-ing's resolution and after 10 years of membership, EAS decided, along with other European deposit guarantee schemes, to withdraw from IADI effective the end of the reporting year.

5.4 NationalassociationsandauthoritiesEntry into force of the new Deposit Guarantee and In-vestor Compensation Act (EAG) in June 2019 required not only extensive implementation efforts on the part of EAS, but also in particular on the part of the affiliated banks. The EAS provided intensive assistance to banks through workshops, templates, and recommendations, which were developed in cooperation with the Banking Expert Committee. The Expert Committee serves as a central interface between EAS and the members of the Liechtenstein Bankers Association (LBA) and is indis-pensable for the exchange of expertise and coordina-tion with the banking centre. In cooperation with the Association of Independent Asset Managers in Liech-

tenstein (VuVL), the members of VuVL were likewise informed of significant new developments.

EAS regularly exchanges information with the Financial Market Authority (FMA) Liechtenstein, given that the FMA is not only the competent supervisory authority for EAS, but as the resolution authority is also responsi-ble for assessing whether a bank is of public interest or not. In a crisis situation, the FMA thus decides whether a bank or parts thereof should continue to operate

within the framework of a resolution mechanism pur-suant to the Recovery and Resolution Act (SAG) or whether it should be liquidated directly through bank-ruptcy proceedings. To optimise crisis organisation, EAS sees a clear need to prepare a written agreement gov-erning interfaces and procedures between the bodies involved, for example based on a Memorandum of Un-derstanding (MoU).

"EAS actively supports the FinTech working group."


6.1 OverviewEach cell constitutes its own protection scheme for cov-ered deposits (only banks) and investor claims (all partic-ipants), with the purpose of financing and processing compensation cases. Operational activities are delegated to the core of the foundatio. During the reporting year, EAS administered four cells for the following categories of financial service providers:

• Banks (authorised under the BankG)• Investment firms (authorised under the BankG)• Asset managers (authorised under the Asset Manage-

ment Act)• Management companies and AIFMs (authorised under

the UCITS Act and the AIFM Act), with a supplementa-ry licence for individual portfolio management

As in the previous years, no compensation cases arose during the reporting year.

6. Cells (ActivityReportunderArticle25(2)EAG)

The costs of operating the protection scheme are borne by the participants through annual fees. Further detailed information on the financial situation of the protection scheme can be found in Chapter 7, 2019 Annual Financial Statement, starting on page 15.

The following overview presents the current endowment and funding as well as the financial situation of the cells, especially the amount and investment of available financial resources4 as of 31 December 2019:

Cells

Banks Investmentfirms

Asset managers

Managementcomp./AIMFs

Number of participants 13 0 106 8

Target level (in %) 0.5 0.3

Basis of calculation Total of covered deposits

Total of covered investor claims

Target level (in CHF) at beginning of reporting year

27,000,000.00 2,500.00 550,000.00 15,000.00

Accumulation phase Until 2028 Until 2024

Financing through Risk-based contributions

Contributions

Use of funds No funds under Article 24 EAG or Article 40 EAG were used during the reporting year.

Available financial resources

– at the beginning of the reporting year 23.94 1,024.17 232,183.71 7,525.92

– at the end of the reporting year 2,700,027.38 1,027.27 302,453.02 10,735.70

of which bank balances 2,005,027.38 1,027.27 302,453.02 10,735.70

ofwhichlow-riskassets 5 0.00 0.00 0.00 0.00

ofwhichpaymentcommitments 6 695,000.00 0.00 0.00 0.00

Return on investments 3.49 3.10 4.92 3.78

4 Under Article 2(1)(19) EAG5 Under Article 2(1)(18) EAG6 Under Article 2(1)(22) EAG


6.2 Cell BanksDuring the entire reporting year, all banks authorised in Liechtenstein with a full licence participated in the bank-ing cell of the deposit guarantee and investor compensa-tion scheme. Not affiliated with the system is SIGMA KREDITBANK AG, which merely has a restricted licence for lending in accordance with Article 3(3)(b) of the Banking Act (BankG) and thus is under no obligation to join a deposit guarantee scheme.

With entry into force of the EAG in 2019, EAS is now re-lying on a combination of ex ante and ex post contribu-tions. The following figure illustrates the instruments at the disposal of EAS by law for funding of the deposit guarantee scheme.

The new deposit guarantee fund to be built up must achieve its legally required target level of 0.5 % of the covered deposits of all participants by the end of 2028.

This target level was set for the first time on the basis of the notifications of covered deposits submitted by the participants as of 31 December 2018. The fund is aug-mented annually by all banks affiliated with the cell through risk-based contributions. A minimum contribu-tion is provided for by law, but has not yet been adopted definitively by EAS.

The contribution calculation method used follows the EBA Guidelines on methods for calculating contributions to deposit guarantee schemes7 taking into account the individual risk positions of banks on the basis of eight risk indicators, which are assigned different weights and con-solidated into an aggregate risk score. On the basis of the sum of covered deposits, the target amount to be col-lected each year is then divided among the banks, ad-justed by the individual overall risk position using a method based on a linear sliding scale.

7 EBA/GL/2015/10

Fundinginstrumentsofthedepositguaranteescheme

Extraordinaryspecialcontributions(Article 19(3) EAG)• Unlimited amounts• Subject to FMA application procedure

Ordinaryspecialcontributions(Article 19(1) EAG)• Maximum of 0.5 % per year• May be levied directly from banks by EAS

Annualcontributionstodepositguaranteefunduntiltargetlevelisreached(Article 18(1) EAG)• Target level: 0.5 %• Expanded reporting obligations• Investment of assets

Onasupplementalbasis:Alternativefinancingoptions (creditoperationsunderArticle23EAG)

expost

ex a

nte


Thefollowingchartshowsthedevelopmentofcovereddeposits (in billion CHF)

Supplementing this, the existing practice of ex post spe-cial contributions in the event of a guarantee case is be-ing retained. The special contributions are also calculat-ed using the risk-based procedure described above. The payment capacity of the banks is ensured by the obliga-tion to maintain liquid assets on a permanent basis in the amount of the greatest possible guarantee case. The basis for determining the individual spe-cial contributions is the report-ing of covered deposits and investor claims, which are consolidated into a weighted guarantee amount and dis-tributed proportionately among the participants using a matrix.

6.3 CellsforotherserviceprovidersAll investment firms and asset management companies as well as UCITS management companies or AIFMs with

a supplementary licence for individual portfolio manage-ment were active participants in the investor compensa-tion system in their respective cells during the reporting year. Turnover occurred mainly among the more than 100 asset management companies, where many existing

authorisations were returned and new companies en-tered the market. The individual additions to and exits from the cells can be found in the participant statistics in Chapter 6.4.

Based on the articles of association as well as the appli-cable cell regulations and participation contracts, the cell assets necessary for an average compensation case are financed in advance by collecting contributions (ex ante

01

2

3

4

5

6

7

8

2017

2016

2019

2018

2015

2014

2013

2012

2011

2010

"The fund contributions take account of the individual risk positions of the banks."


financing). The target level for each cell amounts to 0.3 % of the sum of the covered investor claims of all partici-pants of a cell. That target level was determined for the first time on the basis of the audited sum of the covered investor claims of all cell participants as of the cut-off date of 30 June 2015.

The adequacy of the initial determination of the target level is reviewed each year on the basis of the reports. If the sum of the covered investor claims of all cell partici-pants changes significantly (+20 % / -30 %), the adequacy of the target amount is re-evaluated and, where neces-sary, a new target level is defined. Contributions are lev-ied until the cell assets reach or exceed the target level. After that, no contributions are levied until the actual cell assets fall below the target amount by 10 %.

The target level for the cell assets is being built up over the next ten years by collecting annual contributions from all cell participants. Every cell participant must make a basic contribution of at least CHF 250.00 each year, regardless of whether the participant has covered investor claims or not. In the year of joining a cell scheme, new participants have to provide the basic contribution at least.

6.4 ParticipantstatisticsThe following table shows the development of cell participants in the reporting year:

The list of current cell participants is published on the EAS website at www.eas-liechtenstein.li

2019reportingyear

Numberofparticipantspercell

Banks Investmentfirms

Asset managers

UCITSMCs/AIFMs

TOTAL

01.01. 13 1 109 7 130

New members 0 0 2 0 2

Returns of licences 0 -1 -4 0 -5

Exits 0 0 0 0 0

Change of cell 0 0 -1 1 0

31.12. 13 0 106 8 127

Increase/decrease 0 -1 -3 +1 -3

https://www.eas-liechtenstein.li/en/participants/about-us/list-of-participants


According to the requirements of the Law on Persons and Companies (PGR), the annual financial statement of the foundation contains the financial information for both the core (operation of the institution) and the cells, which serve solely to finance any compensation cases. Separate accounts are maintained for all subare-as. This separation permits unique identification of the individual assets at any time in accordance with Article 243e(4) PGR.

7.1 Informationontheannualfinancial statementAccounting is carried out in accordance with the general provisions of the PGR. The annual accounts have been prepared in accordance with the legislative provisions and the principles of proper accounting. The valuation assumes the foundation's continued existence. The ac-counts are kept in Swiss francs. The rate for tax purposes is used to convert foreign currencies into Swiss francs as of the balance sheet date. There are no deviations from the general valuation principles, accounting methods, and accounting rules as set out in the PGR.

The 2019 fiscal year closed with a revenue surplus of CHF 664.99. The net profit (taking account of the profit brought forward of CHF 35,903.70 from the previous year) thus amounts to CHF 36,568.69. The balance sheet total for 31 December 2019 amounts to CHF 3,610,015.36. The income from participation fees amounts to CHF 263,500.00, of which CHF 14,000.00 re-sults from the collection of admission fees. In connection with the further development of the deposit guarantee function, operating expenses doubled to CHF 567,555.07 due to one-off project costs. CHF 305,000.00 was drawn from other provisions for that purpose as planned. Other provisions at the end of 2019 amounted to CHF 185,000.00, which can be used by the Foundation Board for future project expenses and for the financial relief of participants.

As there are no compensation cases, the cell report (Chapter 7.3) only includes items for ordinary ex ante financing in accordance with the plan for asset accumu-lation.

There were no significant events after the balance sheet date that would require additional disclosures or a cor-rection to the 2019 annual financial statement.

7. 2019 Annual Financial Statement


Balancesheet(inCHF)

Notes 31.12.2019 31.12.2018

Assets CHF CHF

Accounts receivable 695,000.00 3,432.00

of which secured payment commitments 1, CR 695,000.00 0.00

of which other receivables 0.00 3,432.00

Cash and cash equivalents 2 2,915,015.36 1,034,643.68

TOTALASSETS 3,610,015.36 1,038,075.68

Liabilitiesandequity

Foundation capital 30,000.00 30,000.00

Reserves 3 190,000.00 190,000.00

Retained earnings 35,903.70 28,799.79

Annual profit 664.99 7,103.91

Totalequity 256,568.69 255,903.70

Provisions 4 3,199,095.47 734,057.13

Accounts payable 70,284.00 14,448.60

Accrued expenses 84,067.20 33,666.25

Totalliabilities 3,353,446.67 782,171.98

TOTALOFLIABILITIESANDEQUITY 3,610,015.36 1,038,075.68

Incomestatement(inCHF)

Notes 2019 2018

Income from participation fees 5 263,500.00 421,700.00

Operating expenses 6 -567,555.07 -284,440.38

Allocation (-) / releases (+) of other provisions 4 305,000.00 -130,000.00

Financial income from foundation operation -295.23 -186.00

Incomeofordinaryoperation 649.70 7,073.62

Income from cell contributions CR 2,770,038.34 69,999.43

Allocation (-) / release (+) of provisions pay out claims 4, CR -2,770,038.34 -69,999.43

Financial income from cell assets CR 15.29 30.29

Cellincome CR 15.29 30.29

Annualprofit 664.99 7,103.91

CR = Cell Reporting

7.2 Foundation:Balancesheet,incomestatementandnotes


Notestothe2019FinancialStatements

GeneralremarksThe Deposit Guarantee and Investor Compensation Foundation PCC (EAS) is an autonomous foundation under articles 552 et seq. of the Liechtenstein Persons and Companies Act (PGR), entered in the Commercial Register since 6 September 2001. It is set up in the form of a protected cell company (PCC) in accordance with articles 243 et seq. PGR and it does not operate a commercial business (article 107 PGR). Because of its non-profit purpose, the EAS is exempt from corporate income tax.

AccountingandvaluationmethodsAccounting is carried out in accordance with the general provisions of the Law on Persons and Companies (PGR). The annual accounts have been prepared in accordance with statutory regulations and the principles of proper accounting. The valuation assumes the foundation's continued existence.

The accounts are kept in Swiss francs. The rate for tax purposes is used to convert foreign currencies into Swiss francs as of the balance sheet date. There are no deviations from the general valuation principles, accounting methods, and accounting rules as set out in the PGR.

Receivablesandotherassets are stated at their nominal value. All risky items are taken into account by carrying out appropriate value adjustments.

Provisions take into account all uncertain liabilities and anticipated losses from pending transactions. They are stated at the amount required according to reasonable commercial judgement.

They include provisionsforpotentialpayout claims by depositors and investors that are established from the guarantee contributions, as well as otherprovisions which can be used by the Foundation Board for future pro-ject expenses and for the financial relief of participants. As a non-profit foundation, EAS aims to cover the regular annual budget with stable administrative fees. If additional income arises as a result of new admissions or lower expenses, reserves are accrued.

Accountspayable are stated at the repayment amount.

Balance sheet notes

1.Receivablesfrompaymentcommitments(CHF)

Receivables from payment commitments are based on the regulatory provision of Article 18 para. 3 of the Depos-it Guarantee and Investor Compensation Act (EAG). Banks may optionally settle the annual contributions to a limited extent by establishing fully secured payment obligations. The collateral explicitly assigned to the EAS is held in separate custody by a third party.

31.12.2019 31.12.2018

Gross market value of the deposited collateral 714,820.00 0.00


2.Cashandcashequivalents(CHF)

Cell amount CR 2,439,243.37 360,757.74

Core 475,771.99 673,885.94

TOTALCASHANDCASHEQUIVALENTS 2,915,015.36 1,034,643.68

3.Reserves(CHF)

Cell reserves CR 120,000.00 120,000.00

Capital reserves 70,000.00 70,000.00

TOTALRESERVES 190,000.00 190,000.00

4.Provisions(CHF)

Provisions for pay out claims CR 3,014,095.47 244,057.13

Other provisions 185,000.00 490,000.00

TOTALPROVISIONS 3,199,095.47 734,057.13

Status as of January 1 734,057.13 534,057.70

Application 0.00 0.00

New allocation out of income statement 2,770,038.34 199,999.43

Releases to income statement -305,000.00 0.00

STATUSASOFDECEMBER31 3,199,095.47 734,057.13

Incomestatementnotes

2019 2018

5.Incomefromparticipationfees(CHF)

Income form entry fees 14,000.00 95,000.00

Income from administration fees 249,500.00 326,700.00

TOTALPARTICIPANTFEES 263,500.00 421,700.00

6.Operatingexpenses(CHF)

Administration expenses 544,312.97 269,763.74

Public relation expenses 23,242.10 14,676.64

TOTALOPERATINGEXPENSES 567,555.07 284,440.38

Additionalnotes

As of 31 December 2019, there were no sureties, guarantees, pledges, or other contingent liabilities.


7.3 CellReporting

Cellbalancesheetsasof31December2019(inCHF)

Cells BanksInvestment

firmsAsset

ManagersMCs/AIFMs TOTAL

Assets

Receivables from payment commitments 695,000.00 0.00 0.00 0.00 695,000.00

Cash and cash equivalents 2,035,027.38 31,027.27 332,453.02 40,735.70 2,439,243.37

TOTALASSETS 2,730,027.38 31,027.27 332,453.02 40,735.70 3,134,243.37

LiabilitiesandEquity

Provisions for pay out claims 2,699,999.95 1,000.00 302,389.52 10,706.00 3,014,095.47

Cell reserves 30,000.00 30,000.00 30,000.00 30,000.00 120,000.00

Retained earnings 23.94 24.17 58.58 25.92 132.61

Cell income 3.49 3.10 4.92 3.78 15.29

TOTALLIABILITIESANDEQUITY 2,730,027.38 31,027.27 332,453.02 40,735.70 3,134,243.37

Cellincomestatements2019(inCHF)

Segmente BanksInvestment

firmsAsset

ManagersMCs/AIFMs TOTAL

Income from contributions 2,699,999.95 0.00 68,288.39 1,750.00 2,770,038.34

Allocation (-) / releases (+) of provisions pay out claims -2,699,999.95 0.00 -68,288.39 -1,750.00 -2,770,038.34

Resultbeforefinancialincome 0.00 0.00 0.00 0.00 0.00

Financial income 3.49 3.10 4.92 3.78 15.29

Cellincome 3.49 3.10 4.92 3.78 15.29


PricewaterhouseCoopers Ltd, Vadianstrasse 25a/Neumarkt 5, Postfach, 9001 St. Gallen Telephone: +41 58 792 72 00, Facsimile: +41 58 792 72 10, www.pwc.ch

PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

Report of the statutory auditor to the Foundation Board of the

Deposit Guarantee and Investor Compensation Foundation PCC

Vaduz

As statutory auditor, we have audited the annual report, comprising the activity report and the financial statements (bal-ance sheet, income statement, notes and cell reporting) of the Deposit Guarantee and Investor Compensation Founda-tion PCC for the year ended 31 December 2019.

The annual report is the responsibility of the Foundation Board. Our responsibility is to express an opinion on these fi-nancial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualifi-cation and independence.

Our audit was conducted in accordance with auditing standards promulgated by the profession in Liechtenstein, which require that an audit be planned and performed to obtain reasonable assurance about whether the annual report is free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the financial statements. We have also assessed the accounting principles used, significant estimates made and the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements (pages 15 to 19) comply with Liechtenstein law, the articles of incorporation and the regulations.

The activity report (pages 11 to 14) as of 31 December 2019 complies with Liechtenstein law, the articles of incorpora-tion and the regulations. The activity report is consistent with the financial statements and in our opinion does not con-tain any material misstatements.

We recommend that the annual report submitted to you be approved.

PricewaterhouseCoopers Ltd

Beat Rütsche Ilario Monti

Auditor in charge

St. Gallen, 8 July 2020

Enclosure: Annual Report 2019

annual report 2019 · 1 day ago · credits publisher deposit guarantee and investor compensation...

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