In a decision dated 29 January 2020, the Sanctions Commission of SIX Swiss Exchange has imposed a fine of CHF 400,000 on GAM Holding AG for breaching IFRS accounting standards.
GAM Holding AG has since accepted the decision of the Sanctions Commission and has waived its right to appeal. The fine is therefore final and legally binding.
On 4 December 2019, SIX Exchange Regulation AG announced in a media release it was submitting a proposal for sanctions to the Sanctions Commission against GAM Holding AG. In particular, it was claimed that GAM Holding AG had failed to recognize a financial liability in the consolidated balance sheet of the 2017 IFRS annual financial statements. Furthermore, GAM Holding AG had not included the effects of the revaluation of the financial liability in the consolidated income statement of the 2017 IFRS annual financial statements.
In connection with the acquisition of Cantab Capital Partners LLP on 3 October 2016, GAM Hold- ing AG entered into a contractual obligation to pay a share of future performance fees to the previ- ous owners for an indefinite period of time. GAM Holding AG did not recognize this contractual obligation as a financial liability at the acquisition date and at subsequent balance sheet dates. In- stead, GAM Holding AG simply disclosed it as a contingent liability. The Sanctions Commission has qualified the obligation in question as a financial liability under IFRS accounting standards, which must be recognized in the balance sheet and remeasured at each reporting date. The Sanctions Commission qualified the breach of the applicable IFRS rules as a significant violation that was committed negligently.
As a result, the Sanctions Commission approved the proposal for sanctions of SIX Exchange Regula- tion AG and, by decision of 29 January 2020, imposed a fine of CHF 400,000 on GAM Holding AG. The decision of the Sanctions Commission is now final and legally binding given that GAM Holding AG has waived its right to appeal.
