The customer submitted extensive correspondence with the bank to the Ombudsman. The correspondence showed that the bank had already refused several times to make concessions in the unresolved dispute, giving varying reasons for doing so. On the basis of the documents, the Ombudsman had certain doubts as to whether the incident had actually been thoroughly clarified. He contacted the bank and asked it to look into the case again and to clarify with its depositary whether and where exactly an error had occurred with regard to the forwarding of relevant information from the liquidator.
The ombudsman proceedings subsequently dragged on for over a year, as the bank’s statements were received with great delay. The bank stated that according to its depositary, it had received the relevant information in 2014. However, the bank could no longer reliably reconstruct this. Since discrepancies in this regard could no longer be clarified, it had explained to the client in the past that it had not received the relevant information. Even if it had received such information, it had not been obliged to provide it to the client. The client was in an execution-only relationship with the bank, in which the bank had no further obligations other than to accept and execute client orders and to provide custody services. At most, the Bank passed on information to the client on securities held by him on a voluntary basis and as a client-friendly service. With regard to the securities held by the client, the bank had no monitoring obligations and was not required to make any enquiries or investigations into ongoing liquidation proceedings.
In the case of management acts based on its safe custody regulations, it relied on the information it received from available information resources customary in the industry, without assuming any responsibility for it. In the event of an error on the part of its depositary, it was only liable for the proper selection and instruction of it and, in the case of intermediated securities, for monitoring the ongoing compliance with the selection criteria. The bank’s depositary was a recognised institution which had been properly instructed. The bank was not liable for it in the present case.
The bank further claimed that the client was an experienced investor and had knowledge about such liquidation procedures. He had also had direct contact with the liquidator, which the bank could prove with an email from the client to it with information about the proceedings. According to the bank, it would have been up to him to take the necessary steps directly with the liquidator. The client had known that the bank would not file a claim for him on its own initiative. This was also not possible because of banking secrecy. However, the bank supported the clients in this regard upon request. After receiving the statements, the Ombudsman again suggested that the bank consider a settlement, which the bank again rejected.
The case therefore had to be closed without any result for the client. In the Ombudsman’s view, the issue in this case was what obligations the bank had in its capacity as custodian of the fund units, based on the custody regulations and existing practices in the industry. The bank seemed to take the view that, in the context of an execution-only relationship, these already limited administrative duties of the custodian could be further restricted and that actions such as forwarding relevant information on the liquidation procedure would only be voluntary, in the sense of good customer service. The Ombudsman did not comprehend these statements. He assumed that the bank had a duty to forward such information upon receipt.
Whether the bank had actually received the relevant information was disputed. According to the statement of the depositary, the information was forwarded to the bank. The question of liability for the actions of the depository therefore did not arise. Rather, the question was whether the bank itself had made a mistake. Although this could no longer be clarified, there were certain indications that this was the case, as clients of other custodian banks had apparently received the information. In the Ombudsman’s view, even if the bank had been aware of the client’s direct contacts with the liquidator, it would have been obliged to pass on this information upon receipt. Without the bank’s involvement, he would probably not have been able to participate in the further liquidation proceedings at all. The client’s e-mail to the bank, which she had mentioned, could also have provided an opportunity to clarify any misunderstandings regarding the next necessary steps. All in all, the Ombudsman found a situation in which it would have been appropriate for the parties to come to a mutual understanding. The Ombudsman cannot make binding decisions for the parties and is dependent on their willingness to reach a settlement. Unfortunately, in the present case this was not the case on the part of the bank.