E-14/20 Liti-Link AG v LGT Bank AG

EFTA-case  

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Deadlines: Motivation ministry:    26 October 2020
Written observations:                    9 December 2020

Keywords : investment firms; banking;

Subject :

Directive 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive;

Facts of the case:

The applicant is a joint stock company and its purpose consists of the financing of legal disputes and the purchase and collection of debts. The defendant is a joint stock company. Dr Siegbert Bregenhorn has been in a contractual relationship with the defendant since 1999. On 19 May 2018, Dr Siegbert Bregenhorn assigned to the applicant all claims arising from his business relationship with the defendant for collection. The applicant requests for the defendant to be ordered to provide the applicant with information and relevant documents, and to pay the applicant the amount resulting from the aforementioned information. The defendant denied the claim and requested the dismissal of the action. Kindly consult the request for an advisory opinion for further facts and details about this case.

Request for an advisory opinion:

I. Must the final paragraph of Article 26 of Implementing Directive 2006/73/EC according to which the essential terms of the arrangements relating to the fee, commission or non-monetary benefit may be disclosed in summary form, be interpreted as meaning that the disclosure of benefits can be in summary form and general in content?

If the Court answers the first question in the affirmative, the following supplementary question is asked:

1.1. Must the final paragraph of Article 26 of Implementing Directive 2006/73/EC according to which the essential terms of the arrangements relating to the fee, commission or non-monetary benefit may be disclosed in summary form be interpreted as meaning that the disclosure of benefits can be in summary form and general in content, for example, in general or other pre-formulated terms and conditions of business or must the disclosure be made individually for each client or each category of clients?

In addition, the following further questions are referred:

2. Is there a correct disclosure within the meaning of point (b)(i) of Article 26 of Implementing Directive 2006/73/EC if the investment firm merely notifies the client that benefits may be provided to it by third parties or must the investment firm clearly indicate whether and when such benefits are provided?

3. Is there a correct disclosure within the meaning of point (b)(i) of Article 26 of Implementing Directive 2006/73/EC if the investment firm notifies the client that the amount of the benefit provided by the third party depends on the product and consists of a percentage of the management fees charged for the product concerned, a percentage discount on the issue price or a percentage of the issue price or must the investment firm prior to the provision of the investment or ancillary service concerned disclose to the client at least bands concerning the fees, commissions and benefits received by it?

4. Are the conditions laid down in Article 26 of Implementing Directive 2006/73/EC for a disclosure of benefits in summary form, namely that the investment firm undertakes to disclose further details

at the request of the client and that it honours that undertaking, fulfilled if, in relation to transactions already made, the investment firm undertakes merely to disclose to the client further details for the twelve months preceding the request?

5. Must a Member State, pursuant to the EEA Agreement, accord horizontal direct effect to an implementing directive that is not correctly transposed, specifically, Implementing Directive 2006/73/EC?

6. Must Article 26 of Implementing Directive 2006/73/EC be interpreted in such a way that rights of banking clients against a bank may be derived from it?

Cited (recent) case-law

Policy Area: FIN;