FlowBank SA, a Geneva-based online brokerage and trading
bank, has entered bankruptcy proceedings as mandated by the Swiss Financial
Market Supervisory Authority (FINMA). Effective from 13 June 2024 at 8:00 a.m.,
FINMA revoked FlowBank SA’s licenses as a bank and securities dealer, prompting
an immediate cessation of all commercial activities.

Client Reimbursement and Asset Transfer

Clients with cash deposits held in Swiss accounts under
their names are eligible for reimbursement up to CHF 100,000 per client in the
short term. The liquidators are preparing the terms and conditions for
reimbursement, which will be communicated to clients.

Custody assets, such as shares, bonds, funds, and
certificates held by clients, remain separate from the bankrupt estate and will
be transferred back to clients, subject to potential compensation or conditions
determined by the liquidators.

Walder Wyss SA, based in Geneva, has been appointed as the
bankruptcy liquidators to oversee the dissolution process. The jurisdiction for
these proceedings is established at FlowBank’s headquarters in Geneva.

FlowBank SA is prohibited from conducting banking
transactions or acting as a securities dealer without explicit approval from
the liquidators. This prohibition extends to all financial activities,
including payments, securities trades, and legal undertakings.

Since October 2021, FlowBank
SA has been under scrutiny by FINMA due to serious breaches of supervisory
law, specifically concerning capital requirements, organizational adequacy, and
risk management, as reported by Finance
Magnates.

Despite the implementation of extensive measures and the
appointment of an independent auditor in October 2022, the bank persisted in
violating capital ratio requirements and exhibited ongoing deficiencies across
its operations.

Flowbank: Finma’s Patience Runs Out: Geneva-based Flowbank has been declared bankrupt. The reason given by Finma is depositor protection. The list of misdemeanours that it accuses the technology bank of is impressive and extends to… https://t.co/9ef361d15D #flowbank #finma

— finews.ch (@finews_ch) June 13, 2024

Contractual Obligations and Client Impact

All agreements between FlowBank SA and its clients,
including contracts for financial instruments and derivatives, are terminated
with immediate effect.

Clients with contracts of duration, such as leases, are
informed that these will not automatically transfer to the bankrupt estate
unless specified by the liquidators.

Clients and stakeholders are advised to await further
communications from Walder Wyss SA regarding the reimbursement process, asset
transfer procedures, and implications for terminated contracts.

This article was written by Tareq Sikder at www.financemagnates.com.

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