Leonteq : Annual Report 2020 (Leonteq Group)

February 11, 2021 at 05:17 am EST

About the Annual Report 2020

Leonteq AG (referred to hereinafter as the 'company' or 'Leonteq' and, together with its subsidiaries, as the 'Group') deﬁned clear strategic priorities in mid-2018 to enhance scalability, growth and investment experience. Through the disciplined execution of its strategic initiatives, Leonteq has further strengthened its position as a leading service and technology platform and has signiﬁcantly broadened its ecosystem for investment solutions.

We want the Annual Report 2020 to also reﬂect this focused execution of our strategy and the progress made with these key initiatives. Building on the already signiﬁcant changes to the Annual Report 2019, we have critically analysed the design and content aspects of the publication. Based on our ﬁndings, we have made further enhancements and introduced additional disclosures for the reporting year 2020.

In view of the increasing importance of value reporting for our stakeholders, we have signiﬁcantly extended disclosures in several parts of the Annual Report 2020:

REPORTING ASPECTS

The Interview with the Chairman and the CEO is a new feature that provides a more informal discussion of the most important topics and events during the year and allows the interviewees to comment on a range of topics, including critical questions.

The Management Report is a review of the company structure, strategy and product offer-ing, as well as stakeholder engagement and sustainability. It also contains an analysis of ﬁnan-cial performance at both Group and business line level. The report was enriched with new disclosures about our business model, strategic progress and latest innovations. Additional market insights and ﬁve-year summaries of revenues and proﬁts allow for performance analysis over the longer term. A new section was added to illustrate and explain Leonteq's share price movements over a one-year and ﬁve-year period, including a benchmark compari-son. We also extended our employee information section and expanded on data privacy and IT security measures.

The Risk and Control section provides details of the measures taken to ensure the proper assessment and control of risks at Leonteq. The section now contains additional information about the Group's business continuity management and cyber security measures, as well as a discussion of Covid-19 related impacts.

The Corporate Governance section provides a comprehensive overview of Leonteq's share-holder and capital structure and the composition and function of Leonteq's Board of Directors and Executive Committee. The section was further improved with additional information about our shareholder base and a detailed analysis of the composition of the Board and the skills of its members.

The Compensation Report includes an overview of compensation design, transparent disclo-sures of performance assessments, and information on the resulting compensation outcomes for the members of the Executive Committee, members of the Board of Directors and Leonteq employees. As a new feature, it places into context and reviews shareholders voting behaviour at past Annual General Meetings.

The Consolidated Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS). In this section of the Annual Report, accounting policies are referenced directly in the notes of the respective ﬁnancial statement line item. The notes to the ﬁnancial statements are structured according to income statement line items, followed by balance sheet line items.

DESIGN ASPECTS

The new design of the Annual Report is leaner, with more space between blocks of text to improve readability. The inclusion of additional graphic elements and charts helps readers to visualise important aspects of each section. Further, key statements are highlighted in the margins or as call-out quotes to catch the reader's attention.

The Annual Report 2020 is available as a printed document or can be downloaded in PDF format.

It is also summarised in an interactive online version on our website at:

www.leonteq.com/annual-report-2020

CONTENT

FINANCIAL HIGHLIGHTS

334.6

Net fee income (CHF million)

264.9

2020 2019

Total operating income (CHF million)

234.5

256.2

2020 2019

Net proﬁt (CHF million)

39.9

62.7

2020 2019

Shareholders' equity (CHF million)

647.5

662.5

2020 2019

Dividend per share (CHF)

0.75

0.50

2020 2019

At a glance

Total operating income	234.5	256.2	(8%)
Proﬁt before taxes	36.6	65.1	(44%)
Group net proﬁt	39.9	62.7	(36%)
Key ratios
Cost/income ratio	84%	75%	9 pp
Return on equity	6%	10%	(4 pp)
Investment Solutions
Platform assets (CHF billion)1	14.1	14.7	(4%)
Turnover (CHF billion)	26.4	30.3	(13%)
Fee income margin (bps)	118	76	42 bps
Number of clients	1,018	998	2%
Insurance & Wealth Planning Solutions
Number of outstanding policies1	51,577	47,237	9%
Net new policies	4,340	6,042	(28%)
Balance sheet (CHF million)1
Total assets	12,419.2	9,076.8	37%
Total shareholders' equity	647.5	662.5	(2%)
Share information
Market capitalisation (CHF million)1	664	622	7%
Number of shares outstanding1	18,934,097	18,934,097	N/A
Share price (CHF)1	35.05	32.84	7%
Basic earnings per share (CHF)	2.15	3.35	(36%)
Diluted earnings per share (CHF)	2.12	3.30	(36%)
Dividend per share (CHF)	0.75	0.50	50%
Employees
Number of full-time equivalent employees1	519	508	2%
Credit rating
Long-term issuer default rating (Fitch)	BBB-/stable	BBB-/positive	N/A
Long-term issuer rating (JCR)	BBB+/stable	BBB+/stable	N/A

2020	2019 Change

Group results (CHF million)

At the end of the respective period.

Alternative performance measures

On 20 March 2018, SIX Exchange Regulation issued the Directive of Alternative Performance Measures ('APMs') which entered into force on 1 January 2019. In the application of the Directive, any ratio and/or key performance indicator derived from IFRS income statement or balance sheet line items are considered as APMs.

The below list provides deﬁnitions of APMs used by Leonteq in this report.

FINANCIAL HIGHLIGHTS

APM	Deﬁnition
Asset management-like	Revenues generated by issuance and distribution of tracker certiﬁcates,
revenues	actively managed certiﬁcates, and other open-end products
Capital base	Aggregated amount of shareholders' equity and deferred fee income
Cost-income ratio	Total operating expenses as a percentage of total operating income
Economic revenues	Sales and trading income earned and considered to be recognised at trade
date without applying IFRS revenue recognition rules; economic revenues
do not include certain other income components such as rental income
or project cost reimbursements by third parties
Fee income margin	Net fee income relative to turnover in basis points
Hedging contributions	Net result of hedging activities
Large ticket transactions	Single primary or secondary transaction on a single product with a single client
where Leonteq earns a fee of CHF 0.5 million or more
Platform assets	The outstanding volume of products issued and traded through Leonteq's platform
Return on equity	Group net proﬁt as a percentage of average shareholders' equity at the beginning
and at end of the respective period
Turnover	Aggregate notional amount of structured products issued (by Leonteq and its
platform partners) through Leonteq's platform plus the aggregate notional amount
of structured products (issued by Leonteq and its platform partners) traded through
Leonteq's platform
Balance sheet light turnover	Aggregate amount of turnover of structured products where the underlying option
is hedged by an external counterparty (through Leonteq's Smart Hedging Issuance
Platform or through a back-to-back hedging transaction) and of the turnover
of structured products issued by third-parties
Treasury result	Net funding costs related to Leonteq's own issued products

SHARE-HOLDERS' LETTER

DEAR SHAREHOLDERS

2020 was a pivotal year in which we made signiﬁcant progress against our strategy. It was also the year in which we demonstrated our ability to withstand one of the most severe capital market shocks in this century. In the second half of 2020, we have returned to the performance and proﬁtability path that we have built over the past few years and we are conﬁdently looking ahead to seizing new opportunities in the current environment.

Group results

After a very challenging ﬁrst half of 2020 with unprecedented market conditions, Leonteq had a subdued start to the second half of the year, with a slower than usual summer period extending well into September. Client demand in October was lower than in the prior-year period, reﬂecting investor uncertainty due to concerns about the second wave of Covid-19 concerns and tensions in the run-up to the US election. From mid-November, client demand recovered signiﬁcantly and remained at high level until year-end. In this environment, net fee income decreased by 16% to CHF 121.6 million in the second half of 2020 compared to a very strong prior-year period. The net trading result was CHF 8.7 million for the second half of 2020, primar-ily driven by the positive contribution from hedging activities of CHF 11.3 million. With total operating income of CHF 131.0 million and total operating expenses of CHF 99.2 million, Leonteq successfully improved its proﬁtability in the second half of 2020. Group net proﬁt increased to CHF 34.4 million in the second half of 2020 compared to CHF 5.5 million in the ﬁrst half of 2020 and up 6% compared to the second half of 2019.

For the full year 2020, total operating income decreased by 8% to CHF 234.5 million, primarily driven by hedging-related one-off losses of approximately CHF 58 million in the ﬁrst half of 2020. Total operating expenses totalled CHF 197.9 million in 2020 despite signiﬁcant investments in hiring and growth initiatives. Group net proﬁt amounted to CHF 39.9 million in 2020 compared to CHF 62.7 million in the prior year.

Shareholders' equity totalled CHF 647.5 million as of 31 December 2020 compared to CHF 662.5 million at end-2019. Together with deferred fee income of CHF 75.1 million, Leonteq maintained its strong capital base which amounted to CHF 722.6 million as of 31 December 2020.

Segment and regional results

In Leonteq's Investment Solutions business line, platform assets in own Leonteq products reached a record CHF 4.9 billion as of 31 December 2020, representing a 20% increase compared to end-2019. Turnover generated from own issued products increased by 1% to CHF 11.6 billion in 2020 while margins increased signiﬁcantly by 32 basis points to 116 basis points. In our platform partners business, margins improved to 120 basis points from 71 basis points as a result of a management decision to limit activities in the high-turnover low-margin ﬂow business during the Covid-19 period. At the same time, outstanding volumes in platform partners' products decreased by 13% to CHF 9.2 billion at the end of 2020 and turnover gener-ated with platform partners decreased to CHF 14.8 billion compared to the very strong performance of CHF 18.8 billion in the prior-year period.

The Insurance & Wealth Planning Solutions business line saw the number of outstanding policies serviced on the platform increase by 9% to 51,577 policies as of 31 December 2020. Total operating income decreased to CHF 33.5 million in 2020 from CHF 48.3 million in 2019, primarily reﬂecting the challenging market environ-ment with negative long-term interest rates throughout 2020.

In our home market of Switzerland, we reported net fee income of CHF 128.5 million in 2020 - up 15% compared to 2019. Our business in Europe generated 38% growth in net fee income to CHF 173.0 million and the Asia region saw a 17% increase in net fee income year on year to CHF 33.1 million.

Additionally, as planned one year ago, we increased our footprint in Europe and the Middle East by opening new ofﬁces in Milan and Dubai. We also made further progress with the establishment of a service centre in Lisbon for which we hired 20 employees in 2020. We expect to open a new ofﬁce there in the course of 2021.

A focus on strategy

In 2020, we made signiﬁcant strategic progress towards the priorities deﬁned in mid-2018 to enhance scalability, growth and investment experience. As a result of the disciplined execution of our strategic initia-tives, the targeted measures taken in recent years have begun to bear fruit. This has enabled Leonteq to further strengthen its position as a leading service and technology platform and has signiﬁcantly broadened its ecosystem for investment solutions.

Leonteq's Smart Hedging Issuance Platform (SHIP) became fully operational in July 2020. Leonteq contin-ued to enhance its digital marketplace, LynQs, which features an intuitive and responsive design and navi-gation system as well as several new functionalities, enabling Leonteq's clients to manage their portfolio of structured products more efﬁciently across the entire value chain. We also launched new collaborations and partnerships with Rand Merchant Bank, Basler Kantonalbank, Banque Internationale à Luxembourg and PostFinance in 2020. Further, we entered into a collaboration with Google Cloud to support our plat-form scalability and meet the expected higher computation, pricing and trading demand from clients and white-labelling partners. Good progress was made in broadening our product offering in 2020 through adding products on systematic indices and the extension of the underlying universe for actively managed certiﬁcates (AMC). We also signiﬁcantly expanded our efforts in offering tracker certiﬁcates on a large range of crypto currencies and we launched a number of thematic certiﬁcates through our collaborations with Morningstar, Finanz und Wirtschaft, and, most recently, The Market.

Spotlight on sustainability

Recognising the growing importance of ESG and sustainability, we have launched a sustainability initiative that will take shape in 2021. As part of this initiative we will analyse Leonteq's sustainability efforts as a company and identify how and where we can implement sustainable practices within our own operations and managerial processes as well as looking at how we can support our clients and partners in investing responsibly. We see the potential we have to encourage and implement sustainable investing opportunities for our clients and partners and our ambition is to become a leading ESG provider for structured products. We also intend to publish a sustainability report next year.

Shareholder distribution to increase by 50%

In line with Leonteq's conservative dividend policy, the Board of Directors will propose a shareholder distribution of CHF 0.75 per share for the ﬁnancial year 2020, a 50% increase from CHF 0.50 per share for 2019, to the Annual General Meeting on 31 March 2021.

We further target for our capital base to reach the CHF 800 million area, after which we intend to transi-tion to a progressive dividend policy with a payout ratio of more than 50% from net proﬁts. We have thus set a clear target for our capital base and are providing transparency about our ambition to move towards a progressive dividend policy thus underlining our commitment to create sustainable value for our share-holders and all stakeholders.

"We have set a clear target for our capital base and are providing transparency about our ambition to move towards a progressive dividend policy thus underlining our commitment to create sustainable value for our shareholders and all stakeholders."

Christopher M. Chambers Chairman of the Board of Directors

Lukas T. Ruﬂin

Chief Executive Ofﬁcer

WEIVRETNI

OECEHTDNA NAMRIAHCEHTHTIW

INTERVIEWWITHTHECHAIRMANOFTHEBOARDANDTHECEO

INVESTMENTS START BEARING FRUIT

2020 was a year of many unprecedented challenges as the COVID-19 pandemic severely disrupted virtually every aspect of daily life. For Leonteq, protecting the health and well-being of its employees was the ﬁrst priority. At the same time, it swiftly implemented measures to ensure the smooth continuation of business operations in these exceptional times. As a result, Leonteq was able to weather the storm in real periods of market stress and to safeguard its proﬁtability whilst achieving signiﬁcant strategic progress.

The Covid-19 crisis has affected all areas of the economy and society. How did the pandemic change the way Leonteq operates?

Chairman: Despite all the difﬁculties it created, the pandemic also gave Leonteq a unique opportunity to rise to the challenge and demonstrate its resilience. I was pleased to see our employees and man-agement teams working together closely with the shared goal of protecting everyone's health while also safeguarding the proﬁtability of the business. We implemented business continuity management measures early on and provided employees with the necessary infrastructure to work efﬁciently from home. As a result, we did not observe any signiﬁcant disruptions once the new home ofﬁce set-up was in place. I was impressed to see how calmly and responsibly our management and our staff have responded to this situation. I would also like to underscore how well the management team and the Board of Directors communicated and interacted during this period. There was a constant ﬂow of infor-mation and we were always informed of developments. This type of effective communication is key when navigating crisis situations.

You introduced a new corporate culture framework in 2019. How did it evolve in 2020, given the current situation?

CEO: Leonteq's 2020 Corporate Culture Committee spearheaded the ﬁrm's cultural transition last year through a variety of initiatives, including virtual workshops, surveys, interviews, competitions, activities and awards. I really believe that in difﬁcult periods such as this, it is more important than ever to have a strong corporate culture that fosters collaboration between people. And the Corporate Culture Committee did a remarkable job in adjusting Leonteq's cultural offerings as we were forced to go completely digital and do everything remotely. The home ofﬁce set-up may have proved a little challenging for some employees at ﬁrst. However, our Corporate Culture Committee was very engaged and supported managers by providing resources on how best to lead their teams from a distance. The Committee also helped our employees to make the most of the new situation. They brought people together although they were physically apart, which is crucial in these times.

The pandemic also heavily impacted your trading result. Did you change your approach to risk management following these negative impacts?

Chairman: Leonteq has a robust and strict risk management framework, which is monitored by the Audit and Risk Committee of the Board of Directors. The Board of Directors also deﬁnes the company's risk appetite, ensuring it is aligned with our goals of generating a sustainable proﬁt and preserving share-holder value. So, the negative impacts you refer to were mainly attributable to the widespread and unexpected cancellation of dividends as well as the oil-price shock in March. At the same time, as we delivered our full-service offering to clients throughout the challenging market environment, we reported record growth in fee income for the year.

You delivered on your 2018 promise to implement your Smart Hedging Issuance Platform (SHIP) by 2020. When can we expect this initiative to have a sizeable impact on your hedging exposure?

CEO: With SHIP, we established a new platform that is unique in the industry. Such an endeavour takes time and resources, and we have onboarded seven leading investment banks that are actively contribut-ing prices to the platform and are now expanding on our payoffs and further optimising the offering. I see a positive trend overall and expect the share of balance sheet light turnover to continue to grow and reach double digits in 2021.

You announced several new white-labelling partners in 2020 - when will we see ﬁrst impact on turnover growth?

CEO: We are delighted to have launched a cooperation with each of these renowned platform partners. These partnerships are crucial when it comes to diversifying the offering for our clients in our home market of Switzerland as well as providing unique exposure to structured products issued abroad. And quite understandably, the implementation of partnerships with such extensive scope of cooperation requires a lot of time and investments. We are conﬁdent that we will launch the ﬁrst products from the new issuers this year.

Where do you see additional growth opportunities in the coming years?

Chairman: The Board of Directors recognises the growing importance of ESG and sustainability and the potential that Leonteq has to inﬂuence its clients and partners as well as its own sustainable business practices by investing in this area. With this in mind, we have launched a company-wide sustainability initiative in the fourth quarter of 2020 to look at Leonteq's sustainability efforts as an organisation and to identify how and where we can implement sustainability and ESG practices within our operations and management processes. At the same time, we will explore how we can support our clients and partners in investing responsibly. In this sense, it is our ambition to become a leading ESG provider for structured products and we intend to publish a sustainability report next year.

How do you balance cost discipline with the need for investments in key initiatives to drive growth?

CEO: At the beginning of last year we announced the launch of our nearshoring initiative to generate savings and drive future growth in a more cost-efﬁcient manner as our business continues to expand and evolve. We are pursuing this venture and, having chosen Lisbon, Portugal, as our preferred location, have already established a presence there through a serviced ofﬁce setup with around 20 personnel hired. We intend to further expand this initiative with an own Leonteq ofﬁce and to hire up to 100 employees in Lisbon over the next two years.

"These white-labelling partnerships are crucial when it comes to diversifying the offering for our clients in our home market of Switzerland as well as providing unique exposure to structured products issued abroad."

Leonteq has accumulated signiﬁcant capital and yet you are no longer subject to capital adequacy requirements. Could you not return some of your excess capital to your shareholders?

Chairman: As a service and technology provider, we still consider a strong capital base to be essential for our banking and insurance partners. We have built a strong capital base over the years, including through a capital increase in 2018 and a signiﬁcant amount of retained earnings between 2018 and 2020. That said, we introduced a conservative dividend policy last year based on our strategic progress and proﬁtability and we are proposing the shareholder distribution to increase by 50% to CHF 0.75 per share to the upcoming Annual General Meeting. We have now also provided transparency about our ambition to transition towards a more progressive dividend policy in the next 12 to 24 months.

What makes you conﬁdent that you reach your targeted capital base of CHF 800 million by end-2021?

CEO: After three years of extensive investments in key initiatives, we are starting to see these invest-ments start bearing fruit and we are conﬁdent to continue the performance and proﬁtability path we have built over the past few years.

Leonteq has proved that it can diligently execute on its strategy and manage its cost base well - and, yet your share price remains disappointing. What can be done to change that?

Chairman: We are operating in an attractive market where we are beneﬁtting structurally from the pre-vailing low interest rate environment. We feel that with our unique value proposition and expertise, combined with our state-of-the-art marketplace and the diligent execution of our strategy over the past few years, we are well positioned to deliver attractive and sustainable shareholder returns.

INTERVIEWWITHTHECHAIRMANOFTHEBOARDANDTHECEO

"The Board of Directors recognises the growing importance of ESG and sustainability and the potential that Leonteq has to inﬂuence its clients and partners as well as its own sustainable business practices by investing in this area."

TNEMEGANAM

TROPER

117

1243

128

Our Group Group Rreessuultlsts Investment Solutions

2395

2484

InWsPurSance & Wealth Planning Solutions Sustainability & Stakeholder Engagement

OUR GROUP

Leonteq is an independent expert in structured investment products and long-term savings and retirement solutions. We focus on industrialising the production process for structured investment products and unit-linked life insurance policies and on providing our clients and partners with high standards of service delivered by an international team of experienced industry professionals. We have a strong presence in our home market of Switzerland and in Europe, as well as an established footprint in Asia.

LEONTEQ HAS DEVELOPED INTO

A PROVIDER OF

INVESTMENT

SOLUTIONS WITH A LEADING

TECHNOLOGY PLATFORM, A SERVICE AND TECHNOLOGY PROVIDER FOR

Since our company was founded in 2007, we have focused on developing an integrated technology platform that enables the automation of key processes in the value chain for the production of structured investment products and long-term savings and retirement solutions. In the ﬁrst years after Leonteq was established, our value proposition centred on transparency of product documentation, service throughout the product lifecycle, liquidity in the secondary market, security through the innovation of COSI® products and sustainabil-ity. We subsequently entered our second phase as a platform business and white-labelling service provider. Taking advantage of major technology advancements and using state-of-the-art tools and services, the scal-ability of our platform increased, with automation enabling a rapid computation of 3 billion product computa-tions per minute. With the commencement of a third phase in 2018, we set a new business transformation in motion and implemented several initiatives to enable scalability and invest in the growth of the company.

Now, 13 years later, Leonteq has developed from a simple issuer of its own structured products into a provider of investment solutions with a leading technology platform and a service and technology provider for banks and insurance companies, complemented by a unique marketplace for structured products and an innovative savings and retirement solutions platform.

BANKS AND

INSURANCE COMPANIES, A MARKETPLACE FOR STRUCTURED

Provider of investment solutions with a leading technology platform

PRODUCTS, AND AN INNOVATIVE SAVINGS AND RETIREMENT SOLUTIONS PLATFORM

Leonteq offers one of the largest universes of structured products, ranging from over 90 different payoffs and over 2,000 underlyings that include equities, indices, exchange-traded funds, currencies, crypto cur-rencies, interest rates, commodities and individual credit, indices and systematic indices. It processes over 30,000 new issuances and over 160,000 secondary market transactions annually on its technology platform, and provides a multi-issuer offering to clients for up to ten different issuance entities. As such, Leonteq's platform functionalities address changing client needs and the demand for more transparent and ﬂexible solutions within a highly competitive industry. In order to proactively meet these requirements and offer high standards of service, we focus on controlling and automating all key processes along the value chain, based on continuous enhancement of our technology platform, which instantly calculates complex structured ﬁnancial products, even when tailored to individual client needs, and automatically produces all necessary documentation in four languages.

As Leonteq's technology platform is built from the ground up by our inhouse development teams, it is vertically integrated, covering the entire value chain from structuring, pricing, documentation, issuance, listing and settlement to risk management, market-making, lifecycle management, distribution, risk and regulatory reporting, and accounting services. Common platform functionalities are implemented in one unique service layer that can be accessed by other applications. The grid network and calculation servers are crucial for various calculations and the distribution of such calculations. Our technology platform oper-ates on approximately 75 different applications, with data centres working independently on a 24/7 basis in two remote locations outside Zurich as well as elasticised into the cloud. This technology platform plays an essential role in ensuring the quality of our products and services, the timeliness of delivery of our products and services, and the creation of innovative new product and service offerings.

Leonteq has also developed a highly experienced sales force, which is based in 13 local ofﬁces in Zurich, Amsterdam, Dubai, Frankfurt, Geneva, Guernsey, Hong Kong, London, Milan, Monaco, Paris, Singapore and Tokyo. Our sales force serves our clients with customised structured investment products on a daily basis in more than 70 markets around the globe.

Service and technology provider for banks and insurance companies

As a service and technology provider for banks and insurance companies, Leonteq manufactures and manages structured investment products for banks who have become Leonteq platform partners in a white-labelling format. It also enables life insurance companies to produce capital-efﬁcient, unit-linked savings and drawdown solutions with guarantee and upside.

Through its structured investment service platform, Leonteq provides its issuance partners with custom-ised services along the entire product lifecycle, depending on the platform partner's individual needs. Services include: risk management, hedging, market-making and secondary-market servicing; advice onstructuring, establishment of an issuance programme, and design of information and marketing material; production of termsheets and documentation for individual trades; listing and settlement of structured investment products; provision of risk, regulatory and sales reporting related to structured investment products; and provision of corporate centre services (e.g. account posting, book entries and cash ﬂow reports). The issuance of structured products under a white-labelling cooperation arrangement provides our issuance partners with access to additional and diversiﬁed long-term funding and represents an additional revenue stream. At the same time, issuance partners are able to offer their clients structured products in their own name.

Leonteq's Insurance & Wealth Planning Solutions business lines offers a wide array of services to enable efﬁcient unit-linked retail products with ﬁnancial guarantees and upside. It supports its partners in designing the proposition and product concept as well as in deﬁning the operating model and IT architecture, which allows for automised processes and connection to Leonteq's digital insurance platform. It also supports with pricing of investment components and the automatic processing of portfolio allocations to combine guaran-teed investments from banking partners with market instruments in order to exactly match the customer promise across the entire lifecycle of the insurance products. In addition, Leonteq provides hedging services of market exposures, particularly including long-term interest rate risks, management of rule-based market participations, monitoring and risk management of individual insurance policies.

Marketplace for structured products

As a marketplace for structured products, Leonteq acts as both, an issuer of its own products and as a distributor of the products issued on the balance sheet of other ﬁnancial institutions. Its multi-issuer plat-form connects 30 issuers with over 1,000 clients and provides best option prices through its Smart Hedging Issuance Platform (SHIP). With the focus to increase the company's scalability and enhancing the digital client experience, Leonteq's marketplace is driven by its innovations around SHIP, its digital marketplace LynQs and its actively managed certiﬁcate (AMC) offering.

Through SHIP's functionalities, the direct hedging of platform partners and the platform for third-party issuers, Leonteq aims to reduce hedging exposures by outsourcing option components to external coun-terparties. SHIP reduces Leonteq's hedging exposure for Leonteq whilst providing its clients and issuance partners the choice of additional external hedging counterparties. Now operational, SHIP is transforming Leonteq's position from a balance sheet business to a platform business. Before SHIP was implemented, the Leonteq platform allowed clients to select their desired credit risk from 10 different issuers via the multi-issuer platform. However, the option component was mainly provided by Leonteq and internally hedged on an aggregated macro level, resulting in risks that had to be backed by capital. With SHIP, we are outsourcing the option component to third-party providers if they offer a better price. This micro hedging approach on a trade-by-trade basis has always existed but previously took the form of a manual process of price negotiations, conﬁrmations and bookings. To address these constraints, Leonteq is extending its platform to enable the automated quoting, trading and booking of OTC derivative micro hedges through electronic messaging, as well as internal and external automation, providing a low-touch solution.

SHIP extends Leonteq's platform as one of the few - if not the only one - to allow for the automation of both the bond and the option component from third-party providers. This creates beneﬁts for our clients, who thus receive improved execution for the option component and the zero bond component of a struc-tured product for the same level of service, and for our issuance partners, who are able to diversify their counterparty risk away from Leonteq. It also beneﬁts our employees and shareholders by making our busi-ness more scalable and proﬁtable. Our ambition is to leverage our established client, partner and hedging franchise to become the leading marketplace for structured investment solutions worldwide.

As part of the transformation of Leonteq's marketplace, Leonteq is enabling clients to issue and distribute products via their own and captive channels through its digital marketplace LynQs, which was launched in 2019. As an in-house developed technology, LynQs gives Leonteq clients digital access to one of the largest structured product universes available. LynQs is based on Leonteq's analytical library and ﬁnancial product engine, providing Leonteq clients with a completely new investment experience. By gaining access to one of the largest structured product universes, clients beneﬁt from unique lifecycle management and invest-ment ideas, and they can invest in a tailor-made and optimised way. LynQs serves as a 'one-stop shop' and provides Leonteq's clients with external access to applications, services and market and product data that were previously only available internally.

Alongside LynQs, Leonteq's innovative AMC offering for asset managers is designed to customise and imple-ment an investment strategy with greater adjustability, cost efﬁciency and transparency. The AMC Gateway, which is being integrated into LynQs, provides various beneﬁts for clients. These include excellent time-to-market in the issuing process, high ﬂexibility in terms of product design, execution across all asset classes and instruments, and daily detailed reporting on a single AMC basis.

Savings and retirement solutions platform

Leonteq's innovative savings and retirement solutions platform, Omega, is a proprietary platform that enables the fully automated, digital processing of the entire lifecycle of insurance policies and capitalisation products. A key feature is the Omega Portal, which is a web-based application that enables our insurance partners to create, administer and track unit-linked life insurance products. Leveraging a convenient web interface allows the insurer to immediately price and process policy adjustments. It supports a comprehen-sive set of business transaction events out of the box, and thus substantially reduces onboarding costs. In combination with a fully modularised product design, the Omega Portal enables quick time-to market for new unit-linked insurance solutions.

Strategic progress and innovations in 2020

The traditional global banking and ﬁnancial services landscape is being disrupted by the rapid emergence of ﬁnancial technology. Being a contributor to the digital transformation of ﬁnancial services with its vision to become the leading marketplace for structured investment solutions, Leonteq is continuously living by its mission to deliver quality products and services to its partners and clients by reshaping its product, service and digital offering. In doing so, it is committed to enhancing the client experience and strengthening real-time engagement.

With technology and innovation at the core of its activities, Leonteq works by a 'Product Organisation' framework in order to manage its initiatives and remain agile. This project management approach encom-passes several 'products' or projects. It is aligned with Leonteq's business model and reﬂects the company's strategic priorities. The products are staffed independently with stable core teams and, if necessary, sup-ported by subject experts from the entire organisation to ensure and facilitate proper implementation. Each product has a Product Chairman and a Product Owner, both of whom represent the long-term vision and strategy of the product. Many of Leonteq's key offerings and achievements, including SHIP, LynQs and our platform partners and product offerings, have been a direct result of or have been further enabled by the Product Organisation framework.

Throughout 2020, Leonteq has maintained its focused execution of its strategy and measured its progress with a clear set of key performance indicators. As part of this, SHIP became fully operational, new portfolio allocation features were introduced on LynQs, cooperation agreements were signed with four white-labelling partners and strategic partnerships launched with two content and technology providers, and Leonteq's product offering was expanded with the extension of the underlying universe for actively managed certiﬁcates and the launch of new tracker certiﬁcates.

SHIP

Leonteq's Smart Hedging Issuance Platform (SHIP) became fully operational in July of 2020 and is designed to reduce Leonteq's hedging exposure for Leonteq whilst providing its clients and issuance partners the choice of additional external hedging counterparties. To date, seven leading investment banks are connected to the platform, of which six are all actively quoting and executing trades.

Leonteq has also extended its capabilities to enter into back-to-back hedging transactions on a bespoke basis. In addition, it has increased its offering of products manufactured outside the Leonteq platform by providing access to a total of 20 third-party issuers through its marketplace. In this context, Leonteq has also established direct connectivity between its digital marketplace and Barclay's electronic trading platform as well as SG Markets, the trading platform of Societe Generale.

The aggregate amount of turnover of structured products generated with above mentioned initiatives (i.e. SHIP, back-to-back hedging transactions and products issued by third-parties) is referred to as balance sheet light turnover. In 2020, a total notional volume of approximately CHF 1.9 billion, or approximately 7% of total turnover, was directly hedged by an external counterparty compared to CHF 0.7 billion, or approxi-mately 2%, in the prior-year period.

Balance sheet light turnover (CHF million)

H1	H2	H1	H2
2019	2019	2020	2020

LynQs

In 2020, Leonteq continued to invest in LynQs, which features an intuitive and responsive design and navi-gation system as well as several new functionalities, enabling Leonteq's clients to manage their portfolio of structured products more efﬁciently across the entire value chain, including facilitating the management of products issued outside the Leonteq platform. Leonteq also made investments to further enhance the visibility and transparency of its clients' structured products portfolio for real-time monitoring, especially during these challenging times, by launching a new mobile app that is available in 25 countries and offers all the features of LynQs in a simpliﬁed form for their on-the-go needs. Furthermore, Leonteq introduced new portfolio allocation features, which give clients complete autonomy in creating and managing portfolios within their organisations.

A DIGITAL ONE-STOP SHOP FOR STRUCTURED PRODUCTS

LynQs currently has 1,530 users, 31,673 live products and 318 clients onboarded.

Platform partners

Leonteq continues to further expand and streamline its white-labelling issuance model. In 2020, Leonteq enhanced cooperation with its existing platform partners and held discussions and negotiations with new issuers. It welcomed new white-labelling issuance partners Basler Kantonalbank, Banque Internationale à Luxembourg and Rand Merchant Bank to its platform and signed an agreement with PostFinance relating to their cooperation in the ﬁeld of structured investment products. Leonteq is currently working with a total of 10 white-labelling issuers.

WHITE-LABELLING ISSUERS

Leonteq's collaboration with Rand Merchant Bank, a division of FirstRand Bank, covers the issuance and distribution of structured investment products - with Leonteq providing a broad range of services along the entire value chain, including the launch of a structured product offering, structuring, product documentation, hedging of derivative components, market making, lifecycle management and process-ing. Under the terms of the collaboration with Rand Merchant Bank, it is intended that both Leonteq and Rand Merchant Bank will distribute structured investment products to their respective clients. Similarly, Basler Kantonalbank and Banque Internationale à Luxembourg have become new white-labelling partners of Leonteq. As part of Leonteq's broad cooperation agreement with Basler Kantonalbank, the structured investment products issued by Basler Kantonalbank will be distributed by both companies to their respec-tive clients in Switzerland. Leonteq's partnership with Banque Internationale à Luxembourg covers the issuance and distribution of structured investment products with part of this including Leonteq providing Banque Internationale à Luxembourg with a broad range of services along the entire value chain, including distribution, product structuring and issuance.

In early 2020, in a comprehensive tender process, Leonteq competed successfully with well-known issuers of structured products and, in April 2020, signed an agreement to cooperate with PostFinance in the ﬁeld of structured investment products. This agreement signalled the further expansion of the existing cooperation between Leonteq and PostFinance. Back in March 2017, Leonteq and PostFinance launched a pilot project to assess the market potential for PostFinance to issue structured investment products. In this pilot phase, more than 440 structured investment products with a turnover of around CHF 170 million were issued in monthly product series. As part of the new cooperation agreement with PostFinance, Leonteq will provide all services along the entire value chain, including issuing, product documentation, hedging, market making, secondary market services and lifecycle management.

Product offering and documentation

Leonteq made good progress in broadening its product offering in 2020 by expanding its asset management-like business and enhancing its fund derivative and quantitative investment strategies (QIS) capabilities.

Leonteq continued to develop its AMC business as it expanded its product range and extended the under-lying universe for actively managed certiﬁcates. Leonteq also signiﬁcantly expanded its efforts in offering tracker certiﬁcates on Bitcoin Cash, Ether, Litecoin and Ripple as underlyings which resulted in a 482% increase in outstanding volumes to CHF 155 million at end-2020. In addition, Leonteq launched, in collabora-tion with Finanz und Wirtschaft, a new exchange-traded tracker certiﬁcate on the FuW-Eco-Portfolio Index, offering investors a portfolio that meets environmental and economic criteria in the area of CO2 reduction. Leonteq further entered into a new collaboration with Morningstar for the launch of three tracker certiﬁ-cates on Morningstar systematic indices: the Morningstar Developed Markets Electric and Autonomous Vehicles 30 Index, the Morningstar Developed Markets Big Data and Robotics 50 Index, and the Morningstar Developed Europe Renewable Energy30 Index. The expansion of Leonteq's AMC offering into the product world has driven the increase in asset management-like revenues with a 32% growth in net fee income to CHF 36.2 million compared to the prior year.

As part of its fund derivative business, Leonteq provides dedicated trading and structuring expertise on mutual funds via its fund derivative desk and through its close collaboration with a wide range of fund management companies to deliver innovative solutions and competitive pricing. The business currently references over 200 distinct funds in live products, has enabled automated internal pricing on a further 250 funds and has successfully launched products in all of Leonteq's target markets. Combined with its structured productsexpertise, Leonteq is able to offer clients downside protection, upside potential or greater investment ﬂex-ibility when investing in mutual funds and ETFs.

Additionally, by leveraging its multi-asset structuring expertise, Leonteq has further developed its Quantitative Investment Strategies (QIS) offering. In 2020, Leonteq launched 31 indices, 12 of which are calculated and published by Leonteq on a daily basis. Leonteq offers optionality on such indices and utilises volatility target technology to tailor option prices to ﬁt an ever-changing landscape of interest rate and credit spreads. It also enables the full range of multi-asset options for clients whilst maintaining a sound risk framework. As of December 2020, outstanding volumes on Leonteq and third-party administered QIS indices has grown to CHF 300 million with over more than 50 products launched throughout the year.

As a ﬁnancial services provider based in Switzerland and providing services to Swiss end-clients, Leonteq complies with the new investor protection requirements under the new Financial Services Act (FinSA) in all areas including product documentation, which underwent a major transformation in the course of 2020. In this context, Leonteq meets the prospectus requirements for the public offering of a structured product through its issuance and offering programme and ﬁnal terms/pricing supplement, termsheet, and supple-ments & notiﬁcation documents. When offering structured products to retail clients, Leonteq also provides required key information documents (i.e. PRIIPS KID or FinSA KID).

Regional expansion

In 2020, as part of its regional growth strategy, Leonteq increased its footprint in Europe and Asia with the opening of new ofﬁces in Milan and Dubai. The move to Milan was a natural next step to support the business growth and meet the needs of its client base as its activities in Italy continue to grow. Over the years, Italy has become a promising market for structured products with over 1,000 Leonteq certiﬁcates listed on EuroTLX and SeDeX. Leonteq has offered certiﬁcates on the EuroTLX exchange since 2016 and issued its ﬁrst product on SeDeX in October 2019.

With the opening of the ofﬁce in Dubai, Leonteq is also well positioned to offer its services beyond the United Arab Emirates to the Gulf Cooperation Council (GCC) market. In doing so, Leonteq is able to tap into the signiﬁcant market potential for investment solutions in this region and work more closely with its local client base. Once fully established in Dubai, Leonteq intends to expand its local services with a Sharia-compliant offering in the next years.

Nearshoring initiative

As the business continues to expand and evolve, Leonteq has also established a presence in Lisbon, Portugal through a service centre set-up to facilitate future growth in a more cost-effective way. Lisbon was selected as the location of choice in an extensive assessment process, which evaluated several factors, including talent and sourcing opportunities, political stability, quality of life, time zone and cost consider-ations. Phase 1 of establishing a presence in Lisbon has consisted of establishing a serviced ofﬁce set-up. This phase was completed in the second half of 2020, with the hiring of 20 external personnel predomi-nantly in the area of IT development but also within other shared services functions. The implementation of Phase 2 began in the ﬁrst quarter of 2021, which will include the set-up of an own Leonteq ofﬁce with up to 100 designated roles along the entire value chain. The setup of Phase 2 is due to be fully operational by the end of 2022.

Technology platform

The volume of transactions executed on Leonteq's platform has grown signiﬁcantly in the past few years. As the company continues to scale its hedging, issuance and distribution capabilities, Leonteq's platform scalability is also increasing. The platform centres around enabling rapid and low-cost securitisation through automation by continuously upgrading its innovative technology platform and using the latest services that are available in the market for its infrastructure and development. To this end, Leonteq has, among other things, completed a major infrastructure upgrade and migration of its core technology system and has also entered into a collaboration with Google Cloud to augment its distributed (grid) computation capacities using infrastructure from the Google Cloud Platform region in Switzerland. By leveraging Google Cloud infrastruc-ture, Leonteq is able to increase its computation power by elasticising its grid capacity from two on-site data centres into the cloud, thus meeting the higher computation demand that accompanies business growth and increased demand for the pricing and trading of structured investment products from its clients and white-labelling partners. As Leonteq continues to streamline its software development and delivery process, it has also extended its operations to its Insurance & Wealth Planning Solutions unit and, as part of this, has been an early adopter of Google Cloud's Artifact Registry, an offering that is generally available and that will provide Leonteq with even greater scalability, security and standardisation across its software supply chain.

COVID-19

The impact of the coronavirus pandemic was experienced across the world by individuals, companies and entire communities. Leonteq, like many other businesses, experienced the disruption caused by this extraordinary situation. However, it also took the opportunity to align itself with new practices and adopt the norms of the new era.

During the Covid-19 crisis, Leonteq's top priority has been to safeguard the health and safety of its employ-ees, clients and other stakeholders, as well as protecting the business and preserving its proﬁtability. Leonteq implemented business continuity management (BCM) measures early on and has continued to provide full client service despite the use of remote working and other challenges. Leonteq's operations remained available 99.9% of the time and its robust technology platform was able to handle the signiﬁcant amount of trafﬁc on the platform very effectively.

Working arrangements were actively addressed by the company on an ongoing and proactive basis to ensure employee safety and alignment with local government recommendations. Leonteq implemented full home ofﬁce capabilities, including sophisticated trading and IT development set-ups, early on. This meant that once lockdowns were imposed, employees were able to seamlessly transition to working from home from one day to the next. As some governments eased restrictions over the summer months, Leonteq also took a phased approach to bringing staff back to its ofﬁces, ﬁrst with only critical functions working on site and then moving to full team A/B split operations. The sophisticated remote access set-up that Leonteq has in place has allowed for a swift transition between on site and remote working options throughout the year.

Leonteq's top priority is to safeguard the health and safety of its employees, clients and other stakeholders.

GROUP RESULTS

Leonteq improved its proﬁtability in the second half of 2020 after a challenging ﬁrst half of 2020 with unprecedented market conditions. The 2020 consolidated ﬁnancial statements of Leonteq AG, which are prepared in accordance with International Financial Reporting Standards, show that the Group generated net proﬁt of CHF 39.9 million in the reporting year, compared to CHF 62.7 million in 2019.

NET PROFIT IN CHF MILLION 39.9

Total operating income decreased by 8% to CHF 234.5 million in 2020 primarily driven by hedging-related one-off losses of approximately CHF 58 million in the ﬁrst half of 2020. Total operating expenses remained under control at CHF 197.9 million despite signiﬁcant investments in staff and growth initiatives (2019: 191.1 million).

2019 62.7

Leonteq issued 32,225 structured products (-12%) in 2020 and generated a turnover of CHF 26.4 billion, a decrease of 13% compared to the previous year. Platform assets reached CHF 14.1 billion as of 31 December 2020, compared to CHF 14.7 billion at end-2019.

Shareholders' equity totalled CHF 647.5 million as of 31 December 2020, compared to CHF 662.5 million at end-2019. Under the new regulatory framework for securities ﬁrms, Leonteq signiﬁcantly exceeded its regulatory capital requirement of CHF 20 million as of 31 December 2020. Together with deferred fee income of CHF 75.1 million, its capital base stood at CHF 722.6 million as of 31 December 2020.

Income statement

CHF million

FY 2020

FY 2019

Change y-o-yH2 2020

H1 2020

H2 2019

Change y-o-y

Total operating income

234.5

256.2

(8%)

131.0

103.5

131.6

(0%)

Total operating expenses

(197.9)

(191.1)

(99.2)

(98.7)

(97.0)

Proﬁt before taxes

36.6

65.1

(44%)

31.8

4.8

34.6

(8%)

Group net proﬁt

39.9

62.7

(36%)

34.4

5.5

32.5

Net fee income	334.6	264.9	26%	121.6	213.0
Net trading income/(loss)	(98.4)	(3.2)	N/A	8.7	(107.1)
Net interest income/(expenses)	(6.5)	(8.3)	(22%)	(1.5)	(5.0)
Other ordinary income	4.8	2.8	71%	2.2	2.6
Personnel expenses	(120.9)	(116.9)	3%	(57.5)	(63.4)
Other operating expenses	(46.4)	(40.8)	14%	(23.4)	(23.0)
Depreciation	(33.0)	(30.1)	10%	(16.7)	(16.3)
Changes to provisions	2.4	(3.3)	(173%)	(1.6)	4.0
Taxes	3.3	(2.4)	N/A	2.6	0.7

H1 2016

Five-year summary:Total operating income (CHF million)

H2 2016

H1 2017

H2 2017

H1 2018

H2 2018

H1 2019

144.0	(16%)
(10.7)	N/A
(3.1)	(52%)
1.4	57%
(58.1)	(1%)
(21.5)	9%
(15.8)	6%
(1.6)	0%
(2.1)	N/A

H1
2020

H2 2019

H2 2020

Five-year summary: Net proﬁt (CHF million)

H1	H2	H1	H2	H1	H2	H1	H2	H1	H2
2016	2016	2017	2017	2018	2018	2019	2019	2020	2020

Total operating income

The rapid spread of Covid-19 around the world in early 2020 led to the introduction of strict government -imposed controls and travel bans, resulting in a sharp fall in ﬁnancial markets globally. While net fee income beneﬁted from high levels of client activity in this volatile environment, the net trading result was negatively impacted by hedging-related losses driven by the oil price shock in March as well as the widespread and unexpected cancellation of previously announced dividend payments. The subdued start to the second half of the year was followed by a rise in client activity after the US elections in November. On a full-year basis, total operating income decreased by 8% to CHF 234.5 million in 2020, driven primarily by hedging-related one-off losses of approximately CHF 58 million in the ﬁrst half of 2020.

Net fee income

Leonteq primarily generates net fee income by manufacturing and distributing its own products, as well as products issued by its banking partners, i.e. Aargauische Kantonalbank, Banque International à Luxembourg, Basler Kantonalbank, Cornèr Bank, Crédit Agricole CIB, EFG International, PostFinance, Raiffeisen Switzerland, Rand Merchant Bank and Standard Chartered Bank, as well as other third-party issuers. Further, Leonteq generates fee income through its digital platform, which provides unit-linked retail products with ﬁnancial guarantees to insurance companies, i.e. Helvetia and Swiss Mobiliar.

Leonteq achieved a strong start to the 2020 ﬁnancial year with high levels of client activity, resulting in a signiﬁcant increase in fee income, as it continued to deliver its full-service offering to clients, including liquid market-making services. Net fee income rose to a record CHF 213.0 million in the ﬁrst half of 2020. The start to the second half of 2020 was characterised by a slower than usual summer period which extended well into September. In October client demand was lower than in the prior-year period, reﬂecting investor uncer-tainty due to concerns about a second wave of Covid-19 and tensions in the run-up to the US elections. From mid-November, client activity recovered notably and remained at high level until year-end. In this environment, net fee income decreased by 16% to CHF 121.6 million in the second half of 2020, compared to the very strong prior-year period. On a full-year basis, net fee income increased by 26% to CHF 334.6 million in 2020, compared to CHF 264.9 million in 2019.

Large ticket transactions accounted for 6%, or CHF 19.3 million, of net fee income in 2020, slightly below the contribution of 7%, or CHF 17.5 million, in 2019.

Net fee income split by regions

CHF million

FY 2020

FY 2019

Change y-o-yH2 2020

H1 2020

H2 2019

Change y-o-y

Switzerland	128.5	111.7	15%	46.5	82.0	59.3	(22%)
Europe	173.0	125.0	38%	59.8	113.2	69.8	(14%)
Asia	33.1	28.2	17%	15.3	17.8	14.9	3%

Total net fee income

334.6

264.9

26%

121.6

213.0

144.0

(16%)

RECORD NET FEE

All regional operations reported double-digit growth in net fee income. In its home market of Switzerland,

INCOME IN HOME MARKET SWITZERLAND AND EUROPE

Leonteq achieved a record net fee income of CHF 128.5 million in 2020, up 15% compared to 2019. Yield enhancement products such as barrier reverse convertibles and express certiﬁcates continued to represent the most important product category in 2020. Compared to 2019, there was higher demand for participation products such as tracker certiﬁcates, while capital protection products were less popular. While Raiffeisen, EFG International and Leonteq were again the most sought-after issuers, there was also strong demand for Cornèr Bank, and an increasing interest in Standard Chartered Bank.

Operations in Europe experienced the strongest growth in 2020 with an increase of 38% in net fee income to CHF 173.0 million. Besides products issued by EFG International and Leonteq, products issued by Standard Chartered attracted the highest level of client interest. Further, our extended third-party issuer offering has been met with considerable interest and has received increasingly higher demand. Express certiﬁcates, barrier reverse convertibles and credit-linked notes remained the most popular product types in Europe.

Net fee income in Asia increased by 17% year-on-year to CHF 33.1 million, reﬂecting higher demand for products issued by Leonteq and EFG International. Compared to the prior year, investors' interest for products issued by Standard Chartered also increased. There was signiﬁcant growth in demand for barrier reverse convertibles and actively managed certiﬁcates. At the same time, transactions in the high-turnover low-margin ﬂow business were reduced in line with the decision taken by management to limit such activities during the Covid-19 period.

Net trading result

Net trading result is generated on the basis of existing client ﬂow and hedging activities. It represents both the unrealised and realised change in fair value of ﬁnancial assets and liabilities, as well as direct trade-related expenses such as brokerage fees. It is inﬂuenced by hedging activities, which can ﬂuctuate positively or nega-tively depending on market factors. Over the long term, the hedging strategy is expected to have a neutral impact on Leonteq's ﬁnancials. The treasury result represents the net funding costs related to Leonteq's own issued products.

Net trading result of CHF -107.1 million in the ﬁrst half of 2020 was signiﬁcantly impacted by hedging-related losses due to the oil price shock in March (approx. CHF -20 million) as well as the widespread and unexpected cancellation of previously announced dividend payments, which affected cashﬂows from shareholdings owned by Leonteq for hedging purposes (approx. CHF -38 million). In addition, Leonteq recorded a signiﬁcant increase in hedging-related costs as market risk exposures changed rapidly in an increasingly illiquid hedging market and were only partially offset by positive hedging contributions from Leonteq's structurally long volatility position. In the second half of 2020, net trading result came in positive at CHF 8.7 million, compared to CHF -10.7 million in the second half of 2019, primarily driven by positive hedging contributions of CHF 11.3 million, partially offset by treasury carry of CHF -2.6 million. On a full-year basis, net trading result amounted to CHF -98.4 million in 2020, compared to CHF -3.2 million in 2019.

Net interest income

Net interest income primarily results from interest earned on cash and cash equivalents, and interest expense relates mainly to interest paid on short-term credit and credit facility fees.

Net interest income improved by CHF 1.8 million to CHF -6.5 million in the reporting year from CHF -8.3 million in 2019 mainly driven by a decrease in interest expenses due to lower interest rates overall, especially in connection with US dollar interest rates.

Other ordinary income

Other ordinary income represents income charged to issuance partners for services not related to fee income, such as onboarding and project-related costs. It also includes rental income from subleases.

Driven by higher cost reimbursement from newly announced partnerships, other ordinary income increased by CHF 2.0 million to CHF 4.8 million in 2020, compared to CHF 2.8 million in the previous year.

Total operating expenses

Total operating expenses remain under control at CHF 197.9 million despite signiﬁcant investments in hiring and growth initiatives (2019: CHF 191.1 million).

Personnel expenses are the largest component of total operating expenses and mainly comprise ﬁxed and variable compensation for the Group's employees. Personnel expenses increased slightly by 3% to CHF 120.9 million in 2020, mainly driven by higher ﬁxed compensation in line with the increase in average FTEs, partially offset by lower variable compensation. Further, ﬁxed compensation in 2019 was positively impacted by a decrease in pension plan expenses (including a beneﬁt of CHF 4.5 million) on the back of the introduction of a new pension plan.

In accordance with the build-up of a service centre in Lisbon, the number of FTEs has grown by 25% in Europe, while headcount in Switzerland declined by 3%. Overall headcount growth of 2% was mainly driven by the hiring of IT development and operations specialists, increasing the number of FTEs to 519 at end-2020, compared to 508 FTEs at end-2019.

Five-year summary: FTE per region

Switzerland

Europe

Asia

2016

2017

2018

2019

2020

Other operating expenses

Other operating expenses mainly consist of professional services, expenses related to marketing, travel and representation, IT-related expenses, banking fees and other administrative expenses.

Other operating expenses increased by 14%, or CHF 5.6 million, to CHF 46.4 million due to higher project related costs and increased investments.

Depreciation

Long-lived assets (furniture, equipment, leasehold improvements, right-of-use assets, internally developed and purchased software, and IT equipment) are depreciated over their usable lives using the straight-line method.

Depreciation increased by 10% to CHF 33.0 million in 2020. Capital expenditure in information technology and systems amounted to CHF 25.1 million, down 10% from 2019, reﬂecting investments in Leonteq's major strategic initiatives such as LynQs, AMC Gateway and SHIP. Further, Leonteq has completed a major infrastructure upgrade and the migration of its core technology system.

Capital expenditures

CHF million

FY 2020

FY 2019 Change fromYE 2019

Net increase/(decrease) in property and equipment

(1.9)

(2.3)

(17%)

Net increase/(decrease) in information technology and systems

3.9

9.6

(59%)

Capital expenditure	0.4	0.3	33%
Depreciation	(2.2)	(2.3)	(4%)
Other value adjustments/impairments, translation	(0.1)	(0.3)	(67%)
adjustments & reclassiﬁcations
Capital expenditure	25.1	28.0	(10%)
Depreciation	(21.1)	(18.2)	16%
Other value adjustments/impairments, translation	(0.1)	(0.2)	(50%)
adjustments & reclassiﬁcations
Provisions

From time to time, the Group is involved in legal proceedings and litigation that arise in the normal course of business. In 2020, Leonteq built provisions predominantly for such cases totalling CHF 3.4 million. Further, Leonteq released provisions in the amount of CHF 5.8 million in connection with value added taxes, which had a positive impact on provisions in 2020. Change in provisions in 2020 amounted to CHF 2.4 million compared to CHF -3.3 million in 2019.

Balance sheet

Leonteq's total assets increased by 37% during 2020 to CHF 12.4 billion as of 31 December 2020, as compared to CHF 9.1 billion as of 31 December 2019. This increase was primarily driven by an increase in Leonteq's own issued products by 21% to CHF 4.9 billion and a change in the valuation of its derivative hedging positions. The increase in Leonteq's own issued products resulted from a combination of increased issuance and rising markets, which, in the second half of 2020, increased the value of structured notes issued by Leonteq. This increase in liabilities has driven an increase in total assets. In addition, the increase in the positive and negative replacement value of derivatives reported on Leonteq's balance sheet has increased total assets. Derivatives with positive replacement values primarily relate to hedging arrangements entered into with Leonteq's partners. The replacement values of these positions depend largely on share prices, with falling markets leading to larger positive replacement values. Due to this effect, the positive replacement value of derivatives increased signiﬁcantly during the ﬁrst half of 2020 before falling in the second half when markets recovered. Overall, the positive replacement values of derivatives increased by 56% to CHF 4.7 billion. Further, Leonteq's trading equities and indices increased by 63% to CHF 3.6 billion as a result of changes in the amount of equities required to be held as hedges for Leonteq's positions.

Total liabilities increased by 40% to CHF 11.8 billion driven by an increase in the Leonteq's structured product issuance, as well as by a 44% increase in the negative replacement value of derivative to CHF 4.3 billion. This increase in the negative replacement value of derivatives is largely due to hedging positions which lost value as markets fell during the ﬁrst half of 2020 which were not fully offset by gains in value during the sub-sequent market rally. Shareholders' equity totalled CHF 0.6 billion as of 31 December 2020.

Balance sheet

CHF million

31.12.2020

30.06.2020

31.12.2019 Change fromYE 2019

Cash and receivables	1,324.5	1,980.5	1,090.5	21%
Trading equities and indices1	3,566.4	2,298.3	2,181.7	63%
Financial assets / investments2	2,700.2	2,753.2	2,644.4	2%
Derivatives3	4,671.0	6,253.0	2,991.7	56%
Other assets	157.1	164.1	168.5	(7%)
Short-term credit and liabilities	2,339.8	3,295.2	1,082.8	116%
Own structured investment products4	4,944.5	4,097.0	4,092.5	21%
Derivatives and short positions5	4,259.5	5,171.9	2,961.0	44%
Other liabilities	152.9	145.1	171.1	(11%)
Deferred fee income	75.1	80.9	106.9	(30%)

Total assets

12,419.2

13,449.1

9,076.8

37%

Total liabilities

11,771.7

12,790.1

8,414.3

40%

Shareholders' equity

647.5

659.0

662.5

(2%)

1 Trading ﬁnancial assets and trading inventories
2 Other ﬁnancial assets designated at fair value through proﬁt or loss; ﬁnancial investments measured at fair value through other comprehensive income
3 Positive replacement values of derivative ﬁnancial instruments
4 Other ﬁnancial liabilities designated at fair value through proﬁt or loss
5 Negative replacement values of derivative ﬁnancial instruments; Trading ﬁnancial liabilities

Regulatory framework
STRONG EQUITY	The Swiss Financial Institutions Act (FinIA) and the Financial Institutions Ordinance (FinIO) entered into
POSITION	force on 1 January 2020. FinIA regulates the licensing requirements and further organisational rules for
certain ﬁnancial institutions, including securities dealers such as Leonteq, which are now designated as
IN CHF MILLION
securities ﬁrms. The new regime distinguishes between account-holding and non-account-holding securi-
647.5	ties ﬁrms for the application of capital requirements. Securities ﬁrms that do not hold accounts for clients
are no longer subject to the Capital Adequacy Ordinance but must permanently hold capital of at least
2019 662.5	one-quarter of the ﬁxed costs of the last annual ﬁnancial statement, up to a maximum of CHF 20 million.
Leonteq does not hold client accounts and is thus no longer subject to the requirements of the Capital
Adequacy Ordinance. Under the new regulatory framework for securities ﬁrms, Leonteq signiﬁcantly exceeded
its regulatory capital requirement with shareholder's equity totalling CHF 647.5 million as of 31 December 2020
(31 December 2019: CHF 662.5 million). Together with deferred fee income of CHF 75.1 million, Leonteq main-
tained its strong capital base, which amounted to CHF 722.6 million as of 31 December 2020. For further details
on Leonteq's risk management framework, please refer to the "Risk and Control" section on pages 59 to 77.

INVESTMENT SOLUTIONS

In Investment Solutions, we focus on the manufacturing and distribution of structured investment products, which we offer to ﬁnancial intermediaries and institutional and professional clients in more than 50 countries. We also enable and enhance the structured product capabilities of our issuance partners.

Structured investment products are manufactured and managed in our own name or for an issuance part-ner, which acts as the issuer or guarantor of the respective products. Our services cover the entire lifecycle of a structured product. Our clients are serviced by an experienced sales force and they can select from a variety of issuers, asset classes and pay-offs available on the platform.

The distribution of structured investment products is performed either by Leonteq or by our issuance partners. Our distribution capabilities are complemented by a dedicated in-house ideation, structuring, and trading team and include a digital and automated pricing engine.

Our products

Structured products generally comprise pre-packaged, securitised investment solutions based on a single security, a basket of securities, options, indices, commodities, interest rates, debt issuance and/or foreign currencies, and, to a lesser extent, swaps.

While we offer a broad range of structured products, our focus is on products resulting from our issuance partner service offering as well as on products that we offer in our own name. We differentiate between structured investment products and leverage products. Structured investment products include yield enhancement, participation and capital protection products. Leverage products are often exchange-listed and have short-term maturities. The most popular products on Leonteq's platform are yield-enhancement products such as barrier reverse convertibles and autocallables. The most common underlying assets for structured investment products are equities, indices, commodities, foreign currencies, and interest rate and credit instruments.

Turnover by product category (2020)

3% 13%

19%

Yield Enhancement

65%

Leverage

Participation

Capital protection

Since our company was founded in 2007, we have launched over 200,000 structured products on our platform, of which approximately one third were issued in 2019 and 2020.

Structured products issued (in thousands)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

The structured investment products that are most relevant to our product offering can be grouped into three main categories:

CAPITAL PROTECTION PRODUCTS

These products have a minimum redemption at expiry equivalent to their deﬁned level of capital protection, and they therefore protect against losses resulting from a fall in the price of the underlying asset. Capital protection is deﬁned as a percentage of the nominal value (e.g. 100%) and is guaranteed by the issuer or guarantor of the product. In addition, investors may participate in the price movements of the underlying, although they may be limited. Alternatively, the investor may be entitled to a coupon payment. During the lifetime of the product, its value may fall below its capital protection level.

Capital protection certiﬁcates with participation offer a guaranteed repayment of a predeﬁned percentage of the denomination (usually 100%) as well as the opportunity to participate in price gains of the underlying instrument. However, depending on the capital protection level, the participation rate may vary and therefore be lower or higher than would be the case if the underly-ing security was owned outright. The investor is exposed to the credit risk of the issuer or the guarantor and is not entitled to receive any dividends on an underlying equity.

Investors in these products expect the underlying to rise, but to be protected against signiﬁcant drops in the price of the underlying.

Capital protection products are typically structured with a zero-coupon bond and the purchase of a call option (long position) with a strike at 100%. At redemption, the investor is entitled to a cash settlement in the respective product currency that equals the capital protection level multiplied by the denomination. In addition, the investor participates in the appreciation of the underlying.

YIELD ENHANCEMENT PRODUCTS

Investors in yield enhancement products expect sideways or slightly rising underlying prices.

YIELD ENHANCEMENT PRODUCTS

Investors in yield enhancement products expect sideways or slightly rising underlying prices. These products have a reduced level of risk compared to a direct investment in the underlying. Reverse convertibles and barrier reverse convertibles are the most common yield enhance-ment products. The buyer of a reverse convertible surrenders the potential upside exposure to the underlying asset in exchange for an enhanced coupon. The holder of the product generally remains exposed to the downside of the underlying asset.

A barrier reverse convertible offers the investor a coupon regardless of the performance of the underlying asset, combined with conditional downside protection. A barrier event occurs if the level of the underlying asset trades at or below the predeﬁned barrier level. Depending on the terms of the product, the barrier event may occur at any time during the life of the product (American barrier) or only on a predeﬁned observation date (European barrier).

If a barrier event does not occur, the investor receives the initial investment amount at maturity. If a barrier event occurs and the underlying asset is at or below its strike level at maturity, the redemption of the product (physical or cash) will depend on the value of the underlying asset. If a barrier event occurs and the underlying asset at maturity is above its strike level, the investor receives a cash amount equal to the initial investment amount.

A typical barrier reverse convertible can combine two components: A ﬁxed income security such as a bond (investment grade), which is due to be repaid at maturity, and an option-like instrument, which provides the speciﬁc pay-off in addition to the guaranteed coupon payments. The product is typically structured with a zero-coupon bond and the sale of a put (short position) in the form of a down-and-in put option with a strike at 100% and a barrier of 60%. The remaining capital is used to pay the annual coupons (10%) and the fee as well as commission expenses.

PARTICIPATION PRODUCTS

In general, the performance of participation products is closely linked to the underlying asset's price movements, with no up or down limitations, and a comparable risk to a direct investment in the underlying. These products sometimes feature conditional capital protection (e.g. bonus certiﬁcates) or a leveraged upside participation (e.g. outperformance certiﬁcates). The most common participation products are tracker certiﬁcates, which track the performance of the underlying asset on a one-to-one basis.

Investors buying a tracker certiﬁcate are typically seeking to broaden their investment spectrum and are looking for investment opportunities outside the traditional asset categories. Tracker certiﬁcates have the potential to tap into new markets or strategies that are otherwise difﬁcult to access for the investor or entail high costs. Tracker certiﬁcates based on indices or baskets also enable broadly diversiﬁed investments with a single transaction. The investor is exposed to the credit risk of the issuer or the guarantor and is not entitled to receive any dividends on an underlying equity

Our services

We offer our structured products to institutions and private clients. Institutional clients are accessed through both direct and third-party distribution channels, and individual retail clients are typically accessed through third-party distribution channels. Our indirect distribution is built around multiple distribution channels, including asset managers, independent ﬁnancial advisors, business introducers, insurance companies and brokers, banks and other ﬁnancial institutions. Our clients are served by an experienced sales force with the support of a distribution system that includes a dedicated in-house ideation, structuring and trading team as well as a digital, automated pricing engine.

IN 2020, LEONTEQ

SERVED

Economic fee income by type of intermediary

MORE THAN 1,000 CLIENTS

29% 2%
36% 3%
46% 3%

69%

61%

51%

2016	2018	2020
Asset Manager	Financial Institutions	Other

In 2020, 1,018 of our clients entered into at least one primary or secondary market transaction on account of their respective clients or for their own account. In terms of intermediary type, 51% of our economic fee income in 2020 was generated by asset managers, 46% by ﬁnancial institutions and 3% by other parties.

From a geographical perspective, 41% of our economic fee income in 2020 was generated through clients domiciled in Switzerland. In the same period, European clients generated 36% of our fee income, while clients domiciled in Asia and the rest of the world generated 16% and 7%, respectively.

Economic fee income by domicile of intermediary (2020)

16%

41%

Switzerland

Europe

Asia

36%

Other

In addition to structured investment products that we issue in our own name, we manufacture and manage structured investment products for platform partners in a white-labelling format. Through this structured investment service platform, we provide our issuance partners with services that cover the entire product lifecycle and are customised to their individual needs.

Consequently, the scope of cooperation with third-party banks can range from a semi-integrated set-up with only a few services and interfaces to a fully integrated set-up covering the entire product lifecycle.

Our services include:

• Risk management, hedging, market-making and secondary-market servicing (e.g. monitoring of corpo-rate actions, valuation, service hotline);
• Advice on structuring, establishment of an issuance programme, and design of information and marketing material;
• Production of termsheets and documentation for individual trades;
• Listing and settlement of structured investment products;
• Provision of risk, regulatory and sales reporting related to structured investment products;
• Provision of corporate centre services (e.g. account postings, book entries and cash ﬂow reports).

The issuance of structured products under a white-labelling cooperation arrangement provides our issuance partners with access to additional and diversiﬁed long-term funding and represents an additional revenue stream. At the same time, they are able to offer their clients structured products in their own name. Since 2013, we have built a network of platform partners in Switzerland, Europe and Asia, and we currently work with the following ﬁnancial institutions: Aargauische Kantonalbank, Banque International à Luxembourg, Basler Kantonalbank, Cornèr Bank, Crédit Agricole Corporate and Investment Bank, EFG International AG, PostFinance, Raiffeisen Switzerland, Rand Merchant Bank and Standard Chartered Bank. Collaborations with Basler Kantonalbank, Banque International à Luxembourg, PostFinance and Rand Merchant Bank have been launched in 2020. As Leonteq continues to expand its issuance and distribution offerings, it has also started to focus on adding third-party issuers to its platform. Leonteq currently works with 20 third-party issuers in a manual or semi-automated cooperation arrangement and aims to build direct connectivity between its digital marketplace and platforms from third-party issuers.

Leonteq continues to offer its own products, which serve as its primary source of funding, while maintaining the ﬂexibility to offer clients the full range of products and payoffs with any additional features they require.

Since its inception in 2007, our platform assets have grown by an annual average of 28%. As of end-2020, we had CHF 14.1 billion in volumes outstanding on our platform.

Platform assets (CHF billion)

14.7

5.3

3.3

3.1

2.8 1.3

0.7

1.3

2008

2009

2010

2.6

2011

2012*

2013

2014

14.1

11.9

11.4

9.2

7.6

7.9

2015

2016

2017

2018

2019

2020

LeonteqIssuance partners

* Before 2012, products were issued by EFG Financial Products; at the time of the IPO in 2012, Leonteq sold its Guernsey operations to EFG International; after the rebranding in 2013, Leonteq started issuing products under its own name.

Our market

We are primarily active in the structured investment product markets of Switzerland, Europe and Asia. The global market for structured investment products is fragmented and each region is characterised by different types of investor behaviour and product preferences. The structured products market tends to be highly competitive and has been inﬂuenced by the accelerating consolidation in the competitive landscape, with several market participants withdrawing their product offerings over the past few years. This consoli-dation trend creates substantial growth opportunities for Leonteq as other issuers exit the market or start to cooperate with outsourcing partners such as Leonteq.

European Market

The European Structured Investment Products Association (Eusipa) represents the interests of the European structured investment products business. The focal point of its activities are derivative instruments such as structured investment products and warrants. It publishes a quarterly market report with details of the listed turnover and outstanding volumes of the largest structured product exchanges in Europe, including Austria, Belgium, France, Germany, Italy, Netherlands, Sweden and Switzerland. This report provides an indication of market trends but only reﬂects a fraction of the total volume traded.This is due to the fact that in Switzerland, for example, only around 30% of the total turnover is generated with products listed on the exchange. The trading volume of investment and leverage products on European ﬁnancial markets rose sharply during the ﬁrst quarter of 2020, with a year-on-year increase of as much as 92.6%. Turnover in the following two quarters saw a substantial decrease in investment products, while leverage products continued to attract strong demand. Overall, turnover in 2020 for investment and leverage products as of end-September already exceeded the turnover generated during the previous four years.

Eusipa listed market turnover (EUR billion)

113

116

120

109

110

75 38

67 49

67 42

59 51

83 36

2016

2017

2018

2019

Jan-Sep 2020

Investment turnover

Leverage turnover

Switzerland

The Swiss market can be assessed by looking at statistics published by the Swiss Structured Products Association (SSPA), taking into account both listed and unlisted products created in or for Switzerland and sold nationally and internationally, as well as listed turnover only published on a monthly basis by SIX.

Looking at the statistics reported by SSPA, turnover with structured products increased by 4% to CHF 368 billion in 2020. For the full year 2020, yield enhancement products led with a turnover share of 46%, leverage and participation products stood at 27% and 14%, respectively. While turnover with yield enhancement prod-ucts remained stable at CHF 171 billion compared to 2019, leverage products increased substantially to CHF 99 billion (up 57%) and participation products decreased to CHF 50 billion (-30%). Turnover with Capital products remained stable at CHF 47 billion.

From an asset class perspective, equity was again the most important asset class with a 56% turnover share in 2020, followed by foreign exchange and ﬁxed income with a share of 24% and 11%, respectively, continuing the trend seen in 2019. With a 97% increase to CHF 17 billion, commodities showed the highest growth in turnover in 2020 while turnover with equity grew by 7% and turnover with ﬁxed income declined by 8%. With a contribution of 65%, OTC products still account for the majority of turnover produced in 2020, amounting to CHF 239 billion (+8%). Turnover generated with listed products decreased by 2% to CHF 129 billion from CHF 132 billion in 2019. The US dollar was the main currency once again in 2020 with a share of 40%, followed by the Euro which contributed 35% to the total turnover. The Swiss franc share decreased by 3 percentage points year on year to 13%.

SSPA market turnover (CHF billion)

2016

2017

2018

2019

2020

Exchange-listed product statistics are published on a monthly basis by SIX Swiss Exchange. In 2020, turnover with listed yield enhancement products, which represent the most important product category for Leonteq, amounted to CHF 3.1 billion, compared to CHF 3.2 billion in the previous year. At the same time, the Leonteq platform, including products issued by Leonteq and its partners Cornèr Bank, EFG International and Raiffeisen, generated turnover with yield enhancement products of CHF 1.0 billion in 2020 (+6%). This corresponds to a market share of 33%. Leonteq has thus maintained its market leading position for listed yield enhancement products on SIX Swiss exchange.

SIX listed market turnover:Yield enhancement products (CHF billion)

4.0

3.4

3.0

3.2

3.1

2016

2017

2018

2019

2020

Leonteq platform turnover with yield enhancement products on SIX Swiss Exchange

Rank	Turnover	Market share	MARKET-LEADING
(CHF billion)
POSITION
2020	#1	1.0	33%
IN THE YIELD
2019	#1	1.0	30%
ENHANCEMENT
2018	#1	1.0	30%
PRODUCT
2017	#1	1.3	31%
SEGMENT IN
2016	#1	0.7	23%
SWITZERLAND

Total turnover of all listed structured products categories available on SIX Swiss Exchange amounted to CHF 22.6 billion in 2020. The Leonteq platform accounted for CHF 2.0 billion (+29%) of total turnover, repre-senting the third-highest volume of all market participants and corresponding to a market share of 9%.

The Swiss National Bank publishes securities holdings in bank custody accounts for resident and non-resident custody account holders. The numbers show that the amount of money invested in structured products has increased by 17% since the beginning of 2016 to more than CHF 190 billion as of October 2020. At the same time, the share of yield enhancement products has increased from a monthly average of 30% in 2016 to a monthly average of 36% in 2020. The custody accounts are comparable to Leonteq's platform assets and represent the volume of structured products outstanding.

Swiss National Bank: Securities holdings in bank custody accounts (in CHF billion)

250

200

150

100

Jan	Jul	Jan	Jul	Jan	Jul	Jan	Jul	Jan	Jul
2016	2016	2017	2017	2018	2018	2019	2019	2020	2020
Leverage

Participation

Yield enhancement

Capital protection

Italian market

With the move to Milan, Leonteq is underscoring its commitment to the Italian market as well as the impor-tance of this region. In terms of market data, primary issuance data is reported on a quarterly basis by the members of the Italian Association of Certiﬁcates and Investment Products (ACEPI). Secondary market turnover is deﬁned as the listed market turnover with structured products on the SeDeX as well as Cert-x market and is published by Borsa Italiana on a monthly basis.

Total volumes placed by ACEPI members increased signiﬁcantly from 2016 to 2019. However, with EUR 3.9 billion and EUR 4.1 billion placed in the ﬁrst quarter 2020 and the second quarter 2020, respec-tively, volumes were down 23% and 9%, respectively, compared to the prior-year quarters. In the third quarter 2020, volumes even decreased by 32% year-on-year to EUR 2.6 billion. The product range com-prises of capital protected, conditional capital protected and non-capital protected products. Demand for capital protected products increased signiﬁcantly during the course of 2020 from 38% of total volumes in the ﬁrst quarter 2020 to 63% of total volumes in the third quarter of 2020.

ACEPI primary issuance (EUR billion)

2016

2017

2018

2019

Jan-Sep 2020

Secondary market turnover is reﬂected by the turnover in structured products generated on the markets Cert-x and SeDeX. In line with the trend in primary market issuance, overall secondary market turnover decreased by 14% to EUR 25.5 billion in 2020, compared to EUR 29.7 billion in 2019, driven mainly by substantially lower turnover with investment products (-34%), partially offset by higher turnover with lever-age products (+12%). After a strong start to the year with turnover increasing by 60% in the ﬁrst quarter of 2020 compared to the prior-year period, demand for structured products slowed, with year-on-year decline of 33%, 45% and 21% in the second, third and fourth quarters, respectively.

SeDeX & Cert-x listed market turnover (EUR billion)

29.7

27.4

2016

17.2 12.6

2017

2018

2019

2020

Investment products

Leverage products

Leonteq platform turnover with listed investment products on SeDex and Cert-x

Rank	Turnover	Market share
(CHF million)
2020	#4	979.6	9%
2019	#5	850.2	5%
2018	N/A	N/A	N/A
2017	N/A	N/A	N/A
2016	N/A	N/A	N/A

Financial year 2020

In Leonteq's Investment Solutions business line, demonstrating the positive effects of Leonteq's invest-ment grade credit rating, platform assets in own Leonteq products reached a record of CHF 4.9 billion as of 31 December 2020, an increase of 20% compared to end-2019. Turnover generated from own issued prod-ucts increased by 1% to CHF 11.6 billion in 2020 while margins signiﬁcantly increased by 32 bps to 116 bps. In its business with platform partners, margins improved to 120 basis points from 71 basis points primarily resulting from a management decision to limit activities in the high-turnover low-margin ﬂow business during the Covid-19 period. At the same time, outstanding volumes in platform partners' products decreased by 13% to CHF 9.2 billion at end-2020 and turnover generated with platform partners decreased to CHF 14.8 billion in 2020 compared to a very strong prior-year period performance of CHF 18.8 billion.

Segment results

Investment Solutions	FY 2020	FY 2019	Change	H2 2020	H1 2020	H2 2019	Change
y-o-y	y-o-y
Total operating income (CHFm)	197.8	205.5	(4%)	121.0	76.8	98.2	23%
Total operating expenses (CHFm)	(159.4)	(149.5)	7%	(77.1)	(82.3)	(75.1)	3%
Proﬁt before taxes (CHFm)	38.4	56.0	(31%)	43.9	(5.5)	23.1	90%
Platform assets (CHFbn)6	14.1	14.7	(4%)	14.1	13.1	14.7	(4%)
of which platform partner business (CHFbn)1	9.2	10.6	(13%)	9.2	9.0	10.6	(13%)
of which Leonteq business (CHFbn)6	4.9	4.1	20%	4.9	4.1	4.1	20%
Turnover (CHFbn)	26.4	30.3	(13%)	11.0	15.4	15.3	(28%)
of which platform partner business (CHFbn)	14.8	18.8	(21%)	5.6	9.2	9.5	(41%)
of which Leonteq business (CHFbn)	11.6	11.5	1%	5.4	6.2	5.8	(7%)
Fee income margin (bps)	118	76	42 bps	104	129	80	24 bps
Platform partner margin (bps)	120	71	49 bps	104	130	78	26 bps
Leonteq margin (bps)	116	84	32 bps	104	127	84	20 bps

At the end of the respective period.

The number of structured products issued decreased by 12% to 32,225 products due to the decision to limit the high-turnover low-margin ﬂow business during the Covid-19 period as well as due to the more subdued client demand as a result of concerns about a second wave of Covid-19 and tensions in the run-up to the US elections. The number of clients making at least one primary or secondary market transaction grew from 998 to 1,018 intermediaries.

Total operating income in the Investment Solutions business line decreased by 4% year-over-year to CHF 197.8 million in 2020, reﬂecting record net fee income of CHF 312.8 million (+36%), which was par-tially offset by the negative trading result of CHF -109.7 million. Total operating expenses in 2020 increased by 12% to CHF 159.4 million, driven largely by higher other operating expenses (+CHF 3.9 million) and growth in personnel expenses (+ CHF 3.6 million). For the full year 2020, the Investment Solutions busi-ness line reported a decrease in proﬁt before taxes of CHF 17.6 million to CHF 38.4 million compared to CHF 56.0 million in 2019.

Five-year summary: Investment Solutions total operating income and proﬁt before taxes (CHF million)

2020

2016

2017	2018	2019
Total operating income	Proﬁt before taxes

INSURANCE & WEALTH PLANNING SOLUTIONS

The Insurance & Wealth Planning Solutions business line offers life insurers a digital platform that enables unit-linked retail products with ﬁnancial guarantees and upside. Our insurance partners beneﬁt from high levels of capital and cost efﬁciency based on third-party guarantees, upfront hedging and scalable straight-through digital processes, covering the full policy lifecycle at individual policy level. In addition to our plat-form offerings, we provide structured solutions with downside protection, both to life insurers for their single premium business and to insurance brokers. The Insurance & Wealth Planning Solutions business line also provides hedging for structured products on interest rates.

Our Insurance & Wealth Planning Solutions business line generates stable recurring fee income (in-force) and has seen steady growth in the underlying number of policies sold by our insurance partners. The tech-nologically advanced services we provide in this business line have resulted in more than 50,000 individually managed unit-linked life insurance policies being issued on our platform, with over 61,000 policy contract changes and over 1,600,000 individual transactions processed on an automated basis every year.

Our proprietary Omega insurance platform enables a fully automated, digital processing of the entire lifecycle of insurance policies and capitalisation products. A key feature is the Omega Portal, which is a web-based application that enables our insurance partners to create, administer and track unit-linked life insurance products. Leveraging a convenient web-interface allows the insurer to immediately price and

process policy adjustments. It supports a comprehensive set of business transaction events out of the box, and thus substantially reduces onboarding costs. In combination with the fully modularised product design, the Omega Portal enables quick time-to-market for new unit-linked insurance solutions.

More than 50,000 individually managed unit-linked life insurance policies have been issued on our platform, with over 1,600,000 individual transactions processed on an automated basis every year.

Unit-linked insurance policies (in thousands)

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Our products

Our Insurance & Wealth Planning Solutions platform covers an extensive range of product types for every lifecycle stage (savings, investment and drawdown products). Our product offerings support periodic pre-miums and one-off contributions across a broad range of tenors, risk proﬁles and participations on chosen underlyings. Insurance companies can implement innovative and ﬂexible product features and also give advisors and clients the option of tailoring product characteristics to their individual needs (e.g. guarantee levels or capital market participation). In addition, insurance companies can incorporate different guarantee providers for their products, giving clients the choice between guarantees provided by a third-party or the insurer itself.

Principle features of our products include:

• Policy holders receive a minimum guarantee at maturity combined with upside potential through market participation;
• A market-oriented, unit-linked design provides guarantees that are generated directly through instru-ments booked to the account of the policyholder at market conditions;
• Our digital technology platform enables scalable and efﬁcient processing whilst preserving the policy holders' ﬂexibility for numerous lifecycle events throughout the tenor of the policy.

Leonteq currently provides three main types of insurance solutions, based on a platform and hedging services, offering:

LONG-TERM SAVINGS PLANS

Savings plans primarily serve the build-up of retirement provisions for retail clients, based on multiple contributions, typically over long terms, with durations up to 50 years.

Savings plans enabled by Leonteq distinguish themselves from traditional insurance and bank offerings through the integration of market-based guarantee components within each individual unit-linked contract, capital efﬁcient upfront hedging of contract liabilities on individual cashﬂow level over the full contract duration, very high ﬂexibility in terms of payment patterns and guarantee levels, as well as highly automated scalable investment administration.

Our unit-linked guarantee concepts also allow for third party guarantees, where the provider of the savings plan and the guarantee provider are different entities.

DRAWDOWN PLANS

Drawdown plans primarily serve the provision of additional income after retirement over a speciﬁed period of time. They are typically funded through a one-time contribution. They can be combined with a subsequent life annuity insurance.

From a Leonteq perspective, the difference between drawdown and savings solutions simply lies in a different cashﬂow pattern. Thus, Leonteq-enabled drawdown plans are run on the same platform and beneﬁt from the same advantages as the savings plans.

COMBINED SAVINGS AND DRAWDOWN PLANS

Combined savings and drawdown plans serve both the build-up of retirement provisions over time and the subsequent drawdown. Via its platform, Leonteq can efﬁciently combine these stages on an individual cash ﬂow level, applying the beneﬁts described above in one integrated package.

Our services

We are currently engaged in insurance partnerships for unit-linked life insurance policies with Helvetia and Swiss Mobiliar.

To date, Leonteq has launched four products in the Swiss market that are actively being sold: Three are in part-nership with Helvetia Schweizerische Versicherungsgesellschaft AG (Helvetia) and one with Swiss Mobiliar.

The three products offered in partnership with Helvetia include: The Garantieplan, a long-term savings plan available on a regularly ﬁnanced or one-off ﬁnanced basis; the Helvetia Auszahlungsplan, a drawdown plan; and the Helvetia Auszahlungsplan mit Periodischen Investitionen, a combined savings and drawdown plan. As part of our cooperation with Swiss Mobiliar, the insurer offers the Mobiliar Auszahlungsplan, a one-off ﬁnanced drawdown plan, to its retail clients in Switzerland.

Our market

The long-term savings market is continuing to grow in importance in Switzerland. Several factors are driving this trend, including demographic developments, which mean that an increasing proportion of the population is now beginning to consider building and using retirement assets; the sustained low interest rate environ-ment and regulatory stalemate are putting pressure on occupational retirement planning (pillar two), thus increasing the relative importance of private retirement (pillar three) savings. At the same time, industry standards for investment and savings advisory are increasingly shifting away from 'selling outperformance' towards purpose-oriented, goal-based approaches, with retirement savings typically being the minimum objective for retail and afﬂuent clients above the age of 35-40 years.

A large share of pillar three savings is held in capital-protected solutions, as many clients are not willing to take investment risks. For banks and insurers, this poses a problem, as their investment solutions are not aligned with their clients' needs. This has led to a supply gap in the current market for attractive solutions with ﬁnancial protection. If the additional increased preference for ﬂexibility and transparency is factored in, there is a need for a modern and integrated platform that enables a capital protection proposition similar to traditional offerings, produced in a capital- and cost-efﬁcient manner based on a prudent product design and modern hedging approach.

Market share (individual life insurance savings) 2018

Swiss Life

Generali

Helvetia

AXA

Zürich

Basler

Allianz

Pax

Swiss Mobiliar

Other

The below chart illustrates the booked gross premiums for individual life insurance. Since 2014, the premiums of private endowment life insurers have decreased slightly, while the premiums for unit-linked life insurers have increased.

Individual life insurance market (Switzerland) - Booked gross premiums in (CHF million)

7'696

7'465 7'079

674

4'393 2'692

560

4'502 2'403

6'971 6'552

439

4'911 1'729

6'472

6'363

497

4'690 1'754

428

4'358 1'739

313

4'250 1'864

242

4'172 1'949

2012

2013

2014

2015

2016

2017

2018

Private Endowment

Single-Bond

Unit-linked

Financial year 2020

The long-term decline in interest rates came to a sudden end between 2016 and 2018 due to the economic recovery and the scaling-back of the quantitative easing programs of the major central banks. Triggered by the trade dispute between the USA and China and the gradual deterioration in the outlook for the global economy, interest rates have been reduced signiﬁcantly again since 2019. To combat the Covid-19 pandemic, governments and central banks around the globe have responded with aggressive measures, driving Swiss franc long-term interest rates below zero for a prolonged period for the ﬁrst time in history. This unprecedented market environment put high pressure on the product condition competing with prod-ucts not directly linked to market rates.

CHF 30Y swap (%)

3.00

2.50 2.00 1.50 1.00 0.50 0.00 -0.50 -1.00

31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020

Leonteq depends on the external distribution channels of its insurance partners and insurance brokers. Communication and meetings with potential end-clients have been severely impacted by the Covid-19 pandemic. Despite these challenges, the number of outstanding policies serviced on the platform increased by 9% to 51,577 policies as of 31 December 2020. However, this net increase is smaller than in previous periods.

Total operating income decreased to CHF 33.5 million in 2020 compared to CHF 48.3 million in the previous year, primarily reﬂecting the aforementioned challenging market environment. Net trading of CHF 11.3 million in 2020 was relatively stable year-on-year (2019: CHF 12.5 million) with both years being driven by positive contributions from hedging activities.

Total operating expenses remained stable at CHF 15.5 million (+1%), compared to CHF 15.4 million in 2019. The Insurance & Wealth Planning Solutions business line reported a decrease in proﬁt before taxes of CHF 14.9 million, or 45%, to CHF 18.0 million, compared to CHF 32.9 million in 2019.

Segment results

Insurance & Wealth Planning	FY 2020	FY 2019	Change	H2 2020	H1 2020	H2 2019	Change
Solutions	y-o-y	y-o-y
Total operating income (CHFm)	33.5	48.3	(31%)	8.8	24.7	32.2	(73%)
Total operating expenses (CHFm)	(15.5)	(15.4)	1%	(7.0)	(8.5)	(8.0)	(13%)
Proﬁt before taxes (CHFm)	18.0	32.9	(45%)	1.8	16.2	24.2	(93%)
Number of outstanding policies	51,577	47,237	9%	51,577	49,746	47,237	9%

In response to the challenging interest rate environment, Insurance & Wealth Planning Solutions jointly with its partners deﬁned and implemented measures to improve the attractiveness of its savings and draw-down solutions. In addition, Insurance & Wealth Planning Solutions is expanding its product shelf with targeted investments. In an effort to increase the development and testing velocity of its digital insurance platform, Insurance & Wealth Planning Solutions started to invest in a new cloud-based environment to support its growth potential.

Five-year summary: Insurance & Wealth Planning Solutions total operating income and proﬁt before taxes (CHF million)

2016

2017	2018	2019
Total operating income	Proﬁt before taxes

2020

SUSTAINABILITY & STAKEHOLDER ENGAGEMENT

2020 was an extraordinary year. Although Leonteq did not achieve its best ﬁnancial performance during this period, 2020 was a pivotal year in terms of delivering strategic progress and perfor-mance for the overall sustainability of the company. A true stress test for every part of the ﬁrm, 2020 brought heightened discipline and renewed focus on different aspects of the business. These have, in turn, pushed the company's strategic development forward in areas including corporate culture, digital communication and working from home opportunities.

Communication with stakeholders

Brand management

Our brand is the essence of our identity and extends from our company name and logo to everything we do. The name 'Leonteq' combines the two aspects that make our company what it is: "leon" and "teq". "Leon" is associated with the botanical name for the Edelweiss ﬂower (leontopodium alpinum) and repre-sents the company's origin and its commitment to Swiss values. With the ending "teq" we emphasize the innovative technological and expert platform offering that Leonteq provides. Our logo is a symbol of our networks created both externally - by our platform along with our banking and insurance partners - as well as within our employee base.

OUR LOGO IS A SYMBOL OF OUR NETWORKS CREATED

Corporate communication

Leonteq is committed to communicating openly and transparently with its stakeholders at all times to keep them informed of the Group's performance and business activities. We use targeted communication methods and various platforms and we publish all of our corporate and product news on our websites. We are active on LinkedIn, Twitter, Facebook and YouTube and reach different target groups through these channels. Our corporate communications activities encompass a range of online and ofﬂine channels to inform Leonteq's stakeholders in the most effective way possible. Our stakeholders include:

WE ARE ACTIVE ON:

CLIENTS AND PARTNERS

Our clients and partners are serviced by a dedicated sales force of industry professionals with the support of a distribution system that includes in-house ideation and structuring and trading team, as well as a digital, automated pricing engine. Clients and partners receive regular newsletters on product and business updates and can subscribe to the e-mail distribution service to receive free and timely notiﬁcation of potentially price-sensitive facts.

BOARD OF DIRECTORS, EXECUTIVE COMMITTEE AND EMPLOYEES

Employees, the Executive Committee and the Board of Directors receive regular updates on business developments and changes within the company and the industry as a whole. A variety of company events and engagement activities are regularly held for all staff members. Morning Meetings take place regularly to inform staff about internal product structuring updates, as well as external industry affairs with presentations by external business leaders from top ﬁnancial institutions. Townhalls are also held regularly to inform employees about topics ranging from internal business developments and product updates, to important current events and messages from the CEO. In 2020, due to the coronavirus pandemic, corporate events such as Morning Meetings and Townhalls were only held in-person at the beginning of the year. As of March 2020, townhalls took place in virtual formats. Leonteq also communicated regular updates and company information to its employees through email announcements, ofﬁce TV screens, an internal communications chat channel, as well as on its newly updated intranet.

The Communications department holds monthly newsroom meetings with stakeholders from across the company to ensure a proactive exchange of information and appropriate distribution and reach of all internal and external corporate news. Leonteq additionally conducts periodic company-wide surveys to monitor employee satisfaction and ensure employees understand its business strategy.

SHAREHOLDERS, INVESTORS AND ANALYSTS

The Group maintains regular contact with its shareholders, investors and analysts. Leonteq holds individual and group meetings bi-annually during half-and full-year results roadshows as well as at investment conferences. When new analysts take up coverage of Leonteq, they are taken through a thorough onboarding process before initiation. Throughout the year, the Investor Relations department is in proactive contact with its investors and analysts, updating them on business or market developments.

MEDIA AND THE GENERAL PUBLIC

Information is provided to shareholders and other stakeholders each year by means of the annual and half-year reports, together with press releases, presentations and brochures as needed. Interested parties can subscribe to the e-mail distribution service to receive free and timely notiﬁcation of potentially price-sensitive facts. The Company maintains a regular updated sched-ule of important publication and event dates, updated information on matters of corporate governance, as well as the latest version of its Articles of Association on its website.

Notices to shareholders required under Swiss law are made by publication in the Swiss Ofﬁcial Gazette of Commerce. Notices required under the listing rules of the SIX Exchange Regulation are published on the Company's website and simultaneously distributed via press releases to all interested parties, to at least two Swiss newspapers of national importance, to at least two electronic information systems and to SIX Exchange Regulation.

Leonteq simultaneously uses media and social media monitoring to follow what is being written about the company in the media and on the internet every day either in relation to information provided by the company or of independent origin.

RATING AGENCIES

The rating agencies Fitch Ratings Ltd. (Fitch) and Japan Credit Rating Agency, Ltd. (JCR) have evaluated and assigned ratings to Leonteq AG and Leonteq Securities AG (including the Guernsey and Amsterdam branches), respectively. In order to ensure the most accurate and up-to-date rating possible, Leonteq maintains regular contact with these rating agencies and routinely informs them on business developments.

These include several catch-up calls following important announcements or results publication. In addition, Leonteq organises an annual half-day to full-day meeting where management updates the rating agencies on the recent strategic progress including key initiatives, detailed ﬁnancial performance, risk management updates and IT infrastructure.

MEMBERSHIPS

As a leading marketplace for structure investment products, Leonteq is active in promoting and supporting the image of the structured products sector within the Swiss ﬁnancial sector. As such, Leonteq is a member of the Swiss Structured Products Association (SSPA).

The Leonteq share

The registered Leonteq shares of Leonteq AG have been traded on the main standard of SIX Swiss Exchange in Zurich since 2012.

Share price development in 2020

The Leonteq share price started the trading year 2020 at CHF 33.20. It increased signiﬁcantly following the announcement of the full-year 2019 results on 13 February 2020 and marked its year-high at CHF 47.74 on 19 February 2020. With the Covid-19 pandemic becoming more severe and stock markets around the globe plummeting, Leonteq's share price also decreased which was further intensiﬁed follow-ing the announcement of the Group's business update on 9 April 2020, reaching the year-low at CHF 30.20 on 21 April 2020. Later that month and in the period throughout June 2020, Leonteq shares recovered following the announcement of new collaborations and partnerships to CHF 39.75 at end-June and contin-ued to increase to CHF 47.15 until 22 July 2020, the day before the half-year 2020 results announcement. After the publication of Leonteq's half-year results on 23 July 2020, the share price decreased notably to CHF 40.15 by the end of that day and continued to decline to CHF 32.80 at the end of September. From there, the Leonteq share price recovered again towards the end of the year and closed the trading year at CHF 35.05, corresponding to an increase of 6.7%. It thus slightly outperformed the SPI in 2020, which posted a gain of 3.8% over the same period.

Share price performance 2020 (indexed)

160

140

120

100

Jan 2020

Feb 2020

Mar 2020

Apr 2020

May 2020

Jun 2020

Jul 2020

Aug 2020

Sep 2020

Oct 2020

Nov 2020

Dec 2020

LeonteqSPI

Share price performance trend 2016 - 2020 (indexed)

120

100 80 60 40 20 0

H1 2016

H2 2016

H1 2017

H2 2017

H1 2018

H2 2018

H1 2019

H2 2019

H1 2020

H2 2020

LeonteqSPI

Dividend policy

Leonteq entered a new phase of conservative dividend payments in 2020 following a period with no pay-outs to shareholders. The new dividend policy underscores conﬁdence in the company's ability to generate attractive and sustainable returns as the investments in key strategic initiatives start to pay off. In line with Leonteq's conservative dividend policy, the Board of Directors will propose a 50% increase in shareholder distribution to CHF 0.75 per share for the ﬁnancial year 2020 to the Annual General Meeting on 31 March 2021, which is to be paid in equal amounts out of retained earnings and capital contribution reserves.

Dividend history 2016 - 2020

0.75

0.5

0.0

2020*
* Board of Directors' proposal to the Annual General Meeting
Key ﬁgures per share	2020	2019	2018	2017	2016
Book value (CHF)	34.4	34.9	35.4	26.3	24.2
Net proﬁt (CHF)	2.1	3.3	5.3	1.5	1.1
Price/earnings ratio	16.5	10.0	7.7	42.0	30.4
Dividend (CHF)7	0.75	0.50	-	-	-
Dividend yield7	2.1%	1.5%	N/A	N/A	N/A
Payout ratio7	35.4%	15.2%	N/A	N/A	N/A
Share price at year-end (CHF)	35.05	32.84	41.00	60.92	32.88
Full-year high (CHF)	47.74	47.42	65.70	70.54	134.40
Full-year low (CHF)	30.20	28.92	40.60	24.75	32.88

2016

2017

2018

2019

2020 dividend: Board of Directors' proposal to the Annual General Meeting

OUR VISION

[We aspire] to be the leading marketplace for structured investment solutions

OUR MISSION

We deliver quality products and services to our partner and clients

OUR VALUES

Our core values build the foundation of our corporate culture. We live, respect and protect them

We believe in the power of collaboration between our employees, our clients and our partners, and we respect them for their values, knowledge and experience.

Our success is driven by committing to and focusing on our clients' needs, professionally and in a solution-oriented manner.

We uphold professional excellence in everything that we do, creating sustainable relationships and driving innovation.

Corporate culture

With the vision to be the leading marketplace for structured investment solutions, it is our mission to deliver quality products and services to our partners and clients. We achieve this by upholding our core values, which form the essence of our corporate culture.

Our people come together every day with passion and dedication to combine their expertise and deliver quality services for our company, our clients and our partners.

In 2019, we redeﬁned our corporate culture framework, aligning our vision, mission statement and values with the type of company Leonteq has become. Much of 2020 was spent implementing this new culture across the Leonteq brand and within its daily business and corporate environment. These efforts were spearheaded by the company's Corporate Culture Committee, the measures it deﬁned and the initiatives it organised.

Corporate Culture Committee

Leonteq's Corporate Culture Committee comprises 10 members of different ranks and functions from across the company globally. Appointments to the Committee are made in the fourth quarter of each year, when employees are encouraged to run for election. Members are elected via a majority vote and their terms of service begin in January of the following year.

In 2020, the Corporate Culture Committee spearheaded the cultural transition of the ﬁrm through a variety of initiatives, including workshops, surveys, interviews, competitions, activities and awards.

The 'value of the month' initiative focused on a different corporate value each month through special events, new processes and regular communications and check-ins from the Committee. Employees were encouraged to take part in these activities and to focus individually on how they upheld each value individu-ally, within their team and when interacting with other teams. As part of this initiative, employees were able to share their cultural engagement stories through leadership roundtables, dedication challenges, passion statements, quality portraits and teamwork kudos. When asked how they perceived the culture at Leonteq during periodic surveys, 88% of our employees stated that they can clearly identify with Leonteq's corpo-rate values and believe that they apply these values in their daily work. With an emphasis on living by the company's corporate values, the Corporate Culture Committee also established an award that is presented on a monthly basis to employees who demonstrate excellence in their approach to upholding and living by Leonteq's corporate values. In 2020, 20 employees received this award.

88% OF EMPLOYEES IDENTIFY WITH LEONTEQ'S CORPORATE VALUES

Employees

Headcount

At Leonteq, we recognise that our employees are our most important resource and the key to our success in all areas of our business. As our company continues to innovate and expand, we are also growing our workforce with the establishment of two new ofﬁce locations in Milan and Dubai and our new service centre in Lisbon, which will eventually evolve into an own ofﬁce setup with up to 100 designated roles along the entire value chain.

When expanding our workforce, it is important to ensure that all our employees are committed to help-ing achieve the company's goals. Providing interesting ﬁelds of work, attractive training and development opportunities and a safe working environment, while promoting open communication within the team, are our key areas of focus when positioning Leonteq as an employer of choice. We are proud to employ a unique pool of structured investment product experts with extensive experience in the relevant ﬁelds who have been hired from major investment banks, leading law ﬁrms, Big 4 audit and management consulting companies, FINMA and SIX.

As of end-2020, we increased our number of full-time equivalents by 2% to 519 (2019: 508 full-time equiva-lents). This corresponds to a total headcount of 531 employees, which includes 20 contractors hired during the build-up phase of Leonteq's serviced setup in Lisbon. Our workforce comprises 431 male and 100 female employees. We also strive to help our employees achieve a healthy work/life balance, allowing them to combine their professional and personal commitments. As part of these efforts, we offer part-time working models on an individual basis. As of end-2020, 9% of our workforce was employed on a 90% basis or less.

Employee headcount

100

531 HEADCOUNTS

431

Our workforce includes employees from 52 diﬀerent nations

1-20 employees

21-40 employees

41-60 employees

61-80 employees

81-100 employees

>100 employees

As a technology- and service-driven company, the largest proportion of Leonteq employees work within the IT & Operations and

Investment Solutions divisions.

Divisional FTEs

Business Development

CEO2

Human Resources

Insurance & Wealth Planning Solutions 20

Risk 21

Finance & Corporate Services

Markets 45

Legal & Compliance 49

Investment Solutions

136

IT & Operations

198

We have a young and dynamic workforce, with 47% of our employees aged between 26 and 35 years.

Age of our employees

6% 8% 24%

<2626-3031-3536-4041-4546-50

>50

Retention and tenure

We are a young and dynamic company and take pride in the talent we hire. In 2020, against the background of the Covid-19 pandemic, strict cost management and the fact that we are still coming out of a company restructuring that took place in 2017, we experienced an employee turnover rate (deﬁned as the total number of leavers in relation to the average headcount of the respective period) of 14% (19% in 2019; 20% in 2018; 31% in 2017). The decreasing turnover rate in recent years has, in turn, increased our core group of long-serving employees.

In total, 12% of employees have ten or more years of experience at Leonteq (2019: 10%), and 14% have been with the company for between seven and nine years (2019: 11%). 28% of our employees have worked at Leonteq for between four and six years (2019: 29%), and 46% have been with the company for three years or less (2019: 50%).

Five-year summary:Total FTE

2016

2017

2018

2019

2020

Employee support

EMPLOYEES

ARE SEEN AS INDIVIDUALS WITH DIFFERING

Many factors can inﬂuence the working environment: Internal company politics, economic circumstances, or even an employee's personal or family situation. Leonteq's HR department is always available and willing to support all employees or their line managers in clarifying any issues that may arise. For topics that extend beyond our HR department's expertise, a complimentary employee assistance service is offered through the specialised counselling ﬁrm Movis, on topics ranging from work-related issues, to health, personal or ﬁnancial issues. Leonteq is committed to supporting its employees and believes that they should be seen as individuals with differing needs, depending on their personal circumstances.

NEEDS,

Freedom from discrimination

DEPENDING ON THEIR OWN

PERSONAL CIRCUMSTANCES

Leonteq has a zero tolerance policy on discrimination that protects employees throughout the hiring process, their employment with the company and termination of the employment relationship. It covers all relevant aspects, including the assignment of duties, the establishment of conditions of employment, training and further education, promotion/demotion and compensation. It is additionally Leonteq's duty as an equal oppor-tunity employer to respect the principle of equal pay for equal work. The performance of each employee is evaluated based on gender-neutral criteria. Sexual harassment is not tolerated at Leonteq.

COVID-19

OVER 95% OF LEONTEQ EMPLOYEES

WORKED REMOTELY FROM

HOME IN 2020

MORE THAN 23,000 WEBEX

The Covid-19 pandemic had a decisive impact on Leonteq's business operations and employee manage-ment. From the start of the pandemic, the company actively addressed working arrangements by ensuring full home ofﬁce capabilities were set up, including high-demand trading and IT development set-ups, so that once lockdowns were imposed employees were able to seamlessly transition to working from home from one day to the next. As some governments eased restrictions over the summer months, Leonteq also took a phased approached to bringing staff back to its ofﬁces, ﬁrst with only critical functions working on site and then moving into full team A/B split operations. With much of the workforce working from home for most of the year, Leonteq implemented a coronavirus communication and support plan. Among other things, a work from home user guide was available to employees from day one and communication ﬂow was increased with coronavirus updates emailed to employees on a weekly- to monthly-basis. A coronavirus hotline, intranet homepage and roundtables for managers on how to manage teams remotely were also established for additional support.

MEETINGS HELD IN 2020

As the company adjusted to working from home, employees adapted to holding online meetings via Webex video calls and attending group townhalls virtually. They were also encouraged to hold virtual coffee breaks with their colleagues to help maintain contact with their colleagues.

Remuneration

Appropriate remuneration is essential for employee satisfaction and loyalty, and Leonteq is committed to offering its employees competitive compensation packages, challenging work, and an attractive opportunity for personal growth and career development. Fixed remuneration varies according to rank and other require-ments, while variable compensation components are a direct reﬂection of the success of the company and individual performance.

Additionally, Leonteq rewards employees for their loyalty to the company by offering time beneﬁt vacation days and sabbaticals. Upon reaching a service anniversary of 5/15/25/35 years, employees are awarded 5 additional vacation days. Upon reaching service anniversaries of 10/20/30/40 years - depending on the employee's rank - between 10 days and 8 weeks of time off are awarded.

Employee development

From day one, we invest in the development of our employees, both as part of their professional role within a company in the ﬁnancial industry as well as in areas that are partly unrelated to their specialised positions.

All new joiners are invited to attend a multi-part introductory onboarding programme, which gives them an overview of our company, teams, platform, value chains and culture. In 2020 Leonteq additionally extended its onboarding offering, providing new joiners the opportunities beyond Leonteq's pre-existing introductory sessions and presentations to get to know the company as swiftly as possible. Each new employee attends three introductory sessions, which are organised by their line manager, with colleagues outside of their own team. This exercise helps employees to learn and understand the company by gaining a perspective that goes beyond their own function and fosters Leonteq's corporate value 'People Together' from the beginning of an employee's journey with the company.

Job functions that bring a sense of meaning, satisfaction and inspiration to our employees are an important consideration for employee wellbeing. Leonteq offers its employees regular opportunities to develop their skills and knowledge in areas that are partly unrelated to their core ﬁeld of work. These include foreign language courses, attendance of conferences and events to learn more about industry trends, as well as continued education and certiﬁcation programmes such as the CFA. In 2020, six Leonteq employees com-pleted their CFA certiﬁcation, and 29 employees took part in a training course lasting more than one day.

Young talent

Leonteq values and recognises young talent in its workforce. We offer internships and graduate training programmes for less experienced employees. The internship programme, lasting 6 to 12 months, gives university students and new graduates their very ﬁrst professional training within the industry. In the last three years, Leonteq hired 73 interns, 6 of whom subsequently took on graduate positions and 9 of whom were hired directly for permanent roles.

Leonteq's graduate programme, which was initiated in 2015 and subsequently took place in 2016, 2018 and 2019 offers long-term career development opportunities for new graduates by providing tailored, business-speciﬁc training so that they can become highly effective professionals. The 12-month programme includes an off-campus, two-week intensive training course. Upon successful completion of the programme, gradu-ates usually receive full-time employment. Of the 111 graduates hired between 2015 and 2020, 51% are still with the company.

Leonteq leadership

Our managers are crucial to the achievement of our business objectives, and working in networks is becoming increasingly important, as is the ability to communicate effectively. Our leadership programme educates senior management on various topics needed for successful development in the context of their team, employee potential, and individual and professional growth.

In 2020, especially in the context of the coronavirus pandemic, Leonteq hosted a series of roundtables and workshops to support our managers' transition to leading teams remotely. Through these exercises, Leonteq's managers have been able to exchange best practices and voice struggle areas for further company support.

Ethics and compliance

Leonteq has an established standard of conduct based on its Code of Conduct for employees and the Code of Conduct for securities dealers. These documents set forth general principles and guidelines applicable to all Leonteq employees in connection with the conduct of business activities.

It incorporates the best industry standards and outlines business procedures that have been designed to ensure compliance with the applicable laws and regulations under which the company operates. Leonteq's employees are thus informed of the expected standards of conduct and they are expected to stay informed about and to comply with the Code of Conduct, employment regulations and the applicable regulatory requirements. To achieve this, Leonteq conducts mandatory annual compliance trainings for all employees via e-learning and each employee is evaluated based on the expected standards of conduct and Leonteq's corporate culture and values in the annual performance review.

Data protection and cyber security

As Leonteq operates in multiple territories, we ensure that we are compliant with the relevant local data protection regulations including GDPR.

Cyber security is also an important measure in the protection of the company's data and information systems and is included in the annual external auditing of Leonteq's IT systems. The fundamental goals of cyber secu-rity management at Leonteq are to protect the conﬁdentiality of important data, the integrity of its assets and the information they contain, and the availability of all systems, services and information when needed by employees, partners and clients. As such, Leonteq has a dedicated cyber security team supplemented by external cyber security specialists, who identify threats and risks, implement the safeguards needed to deal with them, monitor the safeguards and assets required to manage security breaches, and respond to cyber security issues as they occur. These areas are tested through Leonteq's ongoing internal testing and automated vulnerability scans as well as through a broad range of security tests conducted by external cyber security specialists on a biennial basis as well as when new services are launched.

Leonteq's cyber security team is also in charge of ensuring that the company follows market practices by implementing multiple layers of technical defences against unauthorised access from both internal and external threats. Our technical and governance measures are further supported by regular training and awareness sessions for our employees to ensure that Leonteq conducts its business in a safe and secure manner. These methods include, but are not limited to, training for all staff as part of the company's onboarding program, company-wide townhalls on topics such as general cyber security awareness and data protection dos and don'ts, department level training sessions, online courses with testing, using phishing toolkits to simulate email phishing for the purpose of training and maintaining a cyber security news blog on the company's intranet.

Additionally, Leonteq's Security Management System (ISMS) conducts scheduled checks to ensure proce-dures and routines are conﬁgured correctly and underpin the company's defences.

The internal measures conducted by Leonteq's cyber security team, coupled with its close work with exter-nal cyber security experts, external auditors and legal and compliance teams, ensure Leonteq's compliance with regulatory requirements, good market practice and technical good practice.

Corporate social responsibility

LEONTEQ HAS BEEN THE LEAD SPONSOR OF THE SWISS-SKI YOUTH BIATHLON TEAMS SINCE 2014

At Leonteq, we are committed to operating responsibly, and we strive to have a positive impact on our stakeholders and society as a whole through our activities and engagements. With our long-term vision, we are also committed to economic, environmental and social sustainability, and we have built our Corporate Social Responsibility (CSR) framework from these principles, which we see as integral factors determining the success of our business.

In an effort to put our CSR commitment into practice, Leonteq has supported biathlon sports in Switzerland at a regional and national level and has been the lead sponsor of the Swiss-Ski youth biathlon teams since 2014. Additionally, Leonteq is the main sponsor of 'Junior Biathlon Team Leonteq', which is a competition for the categories Kids (U11 - U15), Challenger (formerly standard category U13 - U15) and Elite. These events are organised in accordance with the IBU (International Biathlon Union). With this initiative and in close collaboration with Swiss-Ski, Leonteq aims to encourage and promote sporting activities from a young age. In 2020, Leonteq also participated in the global Save the Children Christmas Jumper Day fundraising campaign.Through this engagement, the company and employees together not only raised USD 1,437 through 31 individual donations, but also spread extra holiday cheer among its employees who were predominantly working from home for the majority of the year.

Environmental sustainability and our green footprint

Sustainability has long been an important part of Leonteq's corporate culture and Leonteq is committed to using processes that reduce the environmental impacts of our activities and help to protect the earth and our climate. With the growth of our business, we are consistently making efforts to reduce our environ-mental footprint.

Minergie standards

Our Zurich ofﬁce operates according to the Minergie building standard. The emphasis here is on creating comfortable working conditions while reducing energy consumption. Our ofﬁces are also equipped with a controlled air exchanger.

Renewable energy

Leonteq continues to improve its energy consumption as part of its commitment to the cantonal target agreement ("Kantonale Zielvereinbarung") to reduce energy use over the coming decade. The electricity used to run our ofﬁces and data centres comprises 95% renewable energy, 86% of which is generated using hydropower. This compares to only 91% renewable energy in the year prior. In 2020, our Zurich headquarters used 525,000 kWh of energy, and our datacentres used 150,000 kWh each month.

Mobility management

While 2020 was a year of signiﬁcantly reduced travel with much of Leonteq's staff base working from home for part of the year, the company nevertheless continues to encourage employees to engage in sustain-able commuting practices. As part of these efforts, Leonteq subsidises Swiss public transportation pass costs with a contribution of 15% and offers a very limited number of parking spaces to encourage the use of public transport. For the past few years, Leonteq has additionally taken part in the Swiss-wide health promotion campaign bike to work. In 2020, 22 Leonteq employees formed six teams and took part in the challenge to support sustainable mobility, ﬁtness and teambuilding.

LEONTEQ RUNS

ON 95%

RENEWABLE ENERGY

In 2020 Leonteq employees cycled 8,204 kilometres as part of the Swiss bike to work campaign

Certiﬁcates

Leonteq holds an environmental certiﬁcate from PET-Recycling Schweiz for its collection and recycling of PET bottles in 2019. Leonteq collected 51 kilograms (1,851 bottles) of PET bottles, which were recycled into high-grade PET recyclate. In doing so, the company also saved around 153 kilograms of greenhouse gases and 48 litres of oil.

1,851

PET BOTTLES RECYCLED

Responsible investing

As a corporation in the process of integrating sustainability even more deeply into its daily business, Leonteq is active in the area of responsible investing and offers investors the opportunity to invest in structured prod-ucts with sustainably rated underlyings. In 2020, Leonteq launched several sustainably themed products and tracker certiﬁcates. These include trackers on H2 Technology index, Women in CEO Positions, MSCI Europe ESG Leaders index and on the FuW Eco Portfolio index. Leonteq additionally provided a TCM Green Bond Repack as well as AMCs on the FuW Eco Portfolio index and on various Swissquote indexes, including the Hydrogen index, Global eMobility index, Rainbow Rights index, Vegetarian index and Global Recycling index.

Recognising the growing importance of ESG and sustainability, Leonteq has also launched a sustainability initiative that will continue to take shape over the next year. This initiative will analyse Leonteq's sustainabil-ity efforts as a company and identify how and where it can implement sustainable practices within its own operations and managerial processes as well as look at how Leonteq can support its clients and partners in investing responsibly.

Leonteq sees the potential it has to encourage and implement sustainable investing opportunities for its clients and partners and is ambitious to become a leading

ESG provider for structured products. Alongside this, Leonteq intends to publish a sustainability report next year.

60 65 74 77

Risk management and control framework Risk control

Liquidity management Capital management

RISK& CONTROL

AUDITED INFORMATION

ACCORDING TO IFRS 7 AND IAS 1

Risk and control disclosures provided in line with the requirements of International Financial Reporting Standard 7 (IFRS 7), Financial Instruments: Disclosures, and International Accounting Standard 1 (IAS 1), Presentation of Financial Statements, form part of the ﬁnancial statements included in the "Consolidated ﬁnancial statements" section of this report and audited by the independent registered public accounting ﬁrm PricewaterhouseCoopers AG, Zurich. This information is marked as "Audited" within this section of the report.

Signposts

The Audited | signpost that is displayed at the beginning of a section, table or chart indicates that those items have been audited. A triangle symbol -s- indicates the end of the audited section, table or chart.

RISK MANAGEMENT AND CONTROL FRAMEWORK

The proper assessment and control of risks are critically important for Leonteq's busi-ness. In compliance with regulatory requirements in Switzerland and other applicable jurisdictions, the Group has established a comprehensive risk management and control framework covering market risk, credit risk, operational risk and liquidity risk. Established policies and procedures not only ensure that risks are identiﬁed and monitored throughout the organisation but also that they are controlled in an effective and consistent manner.

Risk management and control principles

Risk management and control are an integral component of the ongoing management of Leonteq's busi-ness. Leonteq is exposed to market, credit, operational and liquidity risks as part of its client-focused, fee-based business model. Risk management and control are an important component of this model, ensuring that the activities of Investment Solutions and Insurance & Wealth Planning Solutions - which offer services related to the structuring and issuance of structured investment products - are client-driven rather than motivated by proprietary risk-taking activities.

The following guiding principles are designed to maintain and further develop Leonteq's client-focused business approach:

• The Group's reputation is its most valuable asset and needs to be protected by means of a robust risk framework and effective risk culture;
• Compliance with all regulatory requirements must be ensured at all times;
• The capital base and risk exposures must be continuously managed to ensure that the Group remains adequately capitalized in severe stress scenarios;
RISK MANAGEMENT AND CONTROL ENSURE THAT ACTIVITIES ARE CLIENT-DRIVEN RATHER THAN MOTIVATED BY PROPRIETARY RISK-TAKING ACTIVITIES
• Risk concentrations and exposure to stress scenarios are closely monitored and managed within approved limits;
• Independent risk control functions serve to monitor adherence with the established risk appetite;
• Accurate, timely and detailed risk disclosures are provided to senior management and the Board of Directors, as well as to regulators and auditors.

Leonteq's policies, risk measurement and reporting methodologies and the risk limit framework reﬂect the above principles. The risk framework is continuously being developed to take account of new business activities and changes to its risk proﬁle.

RISK TOLERANCE FRAMEWORK

KEY PROCESSES & TOOLS

Cost management / ﬁnancial reporting & monitoring

Risk and stress testing framework

Risk limit framework

Capital planning / capital management

Proﬁt & loss reporting and analysis / valuation framework / model validation

Liquidity planning, monitoring & management framework

Operational risk framework

Internal control system / ISAE 3402

Sanction policy and policy framework

Incentive system & internal management communication

External rating by a major rating agency

Risk governance

Leonteq's risk governance framework operates according to the "Three lines of defence" model, which provides guidance regarding the main set-up of the internal control system, with its clear allocation of tasks and responsibilities and the segregation of duties between risk management and risk control functions, as well as Internal and External Audit.

THE THREE LINES

OF DEFENCE ENHANCE CLARITY REGARDING RISKS

AND CONTROLS

AND HELP TO

IMPROVE THE

EFFECTIVENESS OF RISK MANAGEMENT

SYSTEMS

Overall responsibility for the Group-wide internal control system lies with the Board of Directors and its com-mittees. The Board of Directors deﬁnes the overall guidelines and performs an assessment of the internal control system on a regular basis. It delegates the implementation and maintenance of the internal control system to the Executive Committee. The ﬁrst line of defence is formed by managers and "risk owners", who are responsible for identifying, assessing and managing inherent risks associated with business activities. Line managers must implement effective internal controls, operational activities and other risk responses to address the risks associated with the processes they manage. The second line of defence consists of functions such as compliance and risk control and provides independent oversight of the risk management activities of the ﬁrst line of defence. The second line of defence prepares the policies, frameworks, tools and techniques to be implemented in the ﬁrst line, conducts monitoring to judge how effectively this is being done, and helps to ensure consistency in the deﬁnition and measurement of risk. The third line of defence comprises the Internal Audit function, which reports independently to the Board of Directors and is not part of the risk management processes. Internal Audit provides an evaluation, using a risk-based approach, of the effectiveness of governance, risk management, and internal control and submits it to the company's Board of Directors and Executive Committee.

The key roles and responsibilities for risk management and control are shown in the following chart and described on the following pages.

Board of Directors | Audit and Risk Committee

Executive Committee | Risk Committee | Product Approval Committee | Treasury Committee

Audited | The Board of Directors is responsible for deﬁning an appropriate framework for the measurement, limitation, management and supervision of all risks to which the Group is exposed. It approves the overall risk policies and global limits, following recommendations by the Audit and Risk Committee.

The Audit and Risk Committee of the Board of Directors monitors a wide variety of risks - especially credit (clients, counterparties, bond investment portfolios, countries, large exposures), market, liquidity, repu-tational and operational risks. It also oversees general risks within the policy, framework, rules and limits set by the Board of Directors or by the Committee itself, as well as the internal control system and risk management process throughout the Group.

The Executive Committee is responsible for the operational management and supervision of all types of risks within the framework and risk appetite deﬁned by the Board of Directors. The Chief Risk Ofﬁcer is responsible for the development of the Group's risk framework, its risk management and control principles, and its risk policies. In this context, the Executive Committee has delegated certain responsibilities to the following committees:

• The Product Approval Committee is responsible for approving new types of ﬁnancial products before they are issued and new services before they are launched. The Product Approval Committee is com-posed of both members of the Executive Committee and employees responsible for operational risk control, trading and treasury.
• The Risk Committee of the Executive Committee is responsible for determining and monitoring liquidity risks, market risk limits, counterparty limits and country-speciﬁc limits within the scope deﬁned by the Board of Directors. It establishes permissible hedging instruments within the scope deﬁned by the Board, approves eligible issuers and stress scenarios, and issues guidelines on the general handling of legal and regulatory risks. The Risk Committee further decides on the initiation of lawsuits, the withdrawal from lawsuits or other legal proceedings, and the conclusion of settlements if the committed amount is below a certain threshold or is not of a material nature.

The Risk Control department is responsible for ensuring that risk exposures remain in line with the risk appetite deﬁned by the Board of Directors. The main responsibilities of Risk Control include:

• Risk identiﬁcation to ensure that all material risks are detected and quantiﬁed;
• Deﬁnition of appropriate risk measures to monitor all material risks;
• Monitoring and controlling of risk exposures against all limits;
• Independent oversight of treasury activities in managing structural FX risks and liquidity risks;
• Escalation of limit breaches to the limit owner;
• Independent proﬁt and loss veriﬁcation and explanation of all trading activities on a daily basis;
• Independent assessment of models;
• Independent price testing of all ﬁnancial positions. s

Risk limit framework

Audited | Risk appetite is deﬁned as the overall level of risk that the Group is willing to accept. The Board of Directors approves Leonteq's Risk Appetite Framework and sets objectives related to risk appetite to ensure sustainable proﬁtability and the preservation of shareholder value. These objectives include the protection of capital, liquidity and earnings during plausible but severe stress scenarios. They are translated into risk limits for individual ﬁnancial risks inherent in the Group's activities and qualitative statements for risks that cannot be quantiﬁed, e.g. operational risk.

Governance | Risk and Product Approval Committees | Policies

Capital management | Capital reporting, monitoring and planning

Liquidity framework | Liquidity Excess Reserves (LER)

Risk and limit framework

Market risk framework

Board market risk limits and alerts Represent the risk appetite on the main risk drivers

EC market risk limits and alerts Limits and alerts set by the Executive Committee on the main and additional risk drivers

Regional limits

Limits allocated to branches or regions

Thresholds

Thresholds against which Risk Control monitors risk exposures

Credit risk framework

Board credit limits

Represent the risk appetite for the main portfolio credit sensitivities

EC credit limits

Limits are set on individual counterparty group level

Risk diversiﬁcation rules

Sets upper bounds for credit limits set by the Executive CommitteeCredit risk mitigation Eliminating credit exposure by means of netting agreements, segregation of collateral

Operational risk framework

Monetary operational risk Tolerance level deﬁnes accepted loss level

Risk identiﬁcation Event reporting, control assessments and risk registerRisk measurement and monitoring Self-assessments, key risk indicators and reports

Risk mitigation

IT initiatives and projects, education and policies

THE RISK LIMIT FRAMEWORK WAS

STRENGTHENED

THROUGH REFINEMENTS

TO ITS LIMIT STRUCTURE

The limit framework has three different levels of limits:

• Board of Directors limits represent the Group's overall risk appetite set by the Board of Directors. Breaches of these limits are escalated to the Board of Directors.
• Executive Committee limits are additional granular limits imposed by the Risk Committee of the Executive Committee.
• Thresholds are the part of the limits deﬁned by the Board of Directors and the Executive Committee that the Executive Committee decides to release in order to closely monitor and control trading activities.

Leonteq's limit framework was strengthened during 2020 through reﬁnements to its limit structure follow-ing its analysis of the market turbulence observed in the ﬁrst half of 2020. The most important of these changes related to certain technical changes in calculation methodology and the introduction of more granular thresholds where appropriate. Leonteq's risk appetite has remained unchanged as a result of reﬁnements to its limit structure.

Risk infrastructure

The Group's risk infrastructure has been continuously developed since Leonteq commenced operations in 2007. It has since made signiﬁcant investments in maintaining and further developing its risk infrastructure. Today, a single position keeping system eliminates the need for complex data and risk aggregation and consolidation systems. A data warehouse that can be accessed by all relevant departments ensures a high level of data consistency. Automated data extractions, enrichment and risk analysis processes allow for a high level of efﬁciency and timeliness when monitoring and reporting risks and risk exposures. Signiﬁcant computational resources are available to handle hundreds of risk and trading reports each day. No approxi-mations or proxy models are used for risk management purposes, i.e. all instruments are fully calculated.

RISK INFRASTRUCTURE

Position keeping

ETL*

Risk management

ETL*

Data warehouse

Risk reportingapplications

P&L reporting applications

Finance systems

External reportingapplication

Instrument repository

* Extract, Transform, Load

As of 31 December 2020, over 100 experienced IT professionals were responsible for maintaining and further developing the Group's systems. The same core information technology system is used across all asset classes, integrating important front-, mid- and back-ofﬁce functions as well as risk management and risk control and quantitative modelling. Leonteq's structured investment service platform consists of its proprietary information technology systems and processes as well as standard hardware and software tools for non-differentiating and commoditised functions.

Sophis RISQUE is the Group's risk management, trading and position keeping system. Leonteq deploys Sophis RISQUE for all products across all asset classes in all its business lines, including for straight-through processing, covering a large part of the value chain from trading to the mid-ofﬁce and the back ofﬁce areas. Sophis RISQUE is also integrated with in-house systems used in risk control to perform stress scenario, sensitivity and other calculations. In the second half of 2020, the Group completed its upgrade to a new version of Sophis RISQUE, which allows the Group to beneﬁt from additional features provided in the new version, while continuing to rely on support from Finastra, the developer of Sophis RISQUE. In addition, the Group completed the rollout of an enhanced stress engine, allowing the Group to perform a wider array of stress calculations with increased reliability. The successful migration to the new version of Sophis RISQUE is a key milestone in the ongoing development of the Group's risk infrastructure.

Analytics Service, which includes Leonteq's Analytics Library, plays a key role in all the quantitative and analytical computations performed by Leonteq and it serves as the basis for all pricing and risk management applications. The Analytics Library is a proprietary library that contains quantitative pricing and risk-manage-ment models that are developed in-house. Since it covers all asset classes, the Analytics Library allows for the creation of hybrid products and the implementation of new payoffs across all asset classes. It currently supports a wide number of different payoffs and can be extended using scripting language. The Analytics Library contains functions allowing for the consistent calibration of the Group's market data. The resulting volatility surfaces allow both exotic and vanilla options to be priced on a continuous basis. This methodology enables the Group's traders to efﬁciently maintain a large universe of underlyings, facilitating short response times to client requests. The combination of pricing functionality and calibration methods for market data within the Analytics Library ensures that Leonteq's pricing and analytical computations are not only indicative but also tradable and executable for clients.

SUCCESSFUL MIGRATION TO THE LATEST VERSION OF SOPHIS RISQUE IS A KEY MILESTONE IN THE ONGOING DEVELOPMENT OF THE RISK INFRASTRUCTURE

INCORE is a proprietary data warehouse that was developed in-house and is used for internal and external reporting and data delivery. It serves as the central repository of risk and ﬁnancial data reporting and is used by several departments, such as Risk Control, Finance, Compliance,Trading andTreasury. In addition, it serves as the reporting engine for regular data delivery to platform partners. INCORE also stores instrument and market data for end-of-day pricing requests and is used for daily proﬁt and-loss analysis. Data and reports are distributed and provided to end-users via automated schedules or visualised in dashboards using business intelligence tools.

RISK CONTROL

Audited | Leonteq's Risk Control department is responsible for identifying, monitoring and controlling risks resulting from the issuance of structured investment products to clients, which the Group seeks to hedge efﬁciently. It is exposed to market risk, which results from mismatches between its exposure to equity prices, interest rates, currencies, credit spreads and commodity prices arising from the issuance of structured investment products and the instruments that are used to hedge that exposure. It is also exposed to liquidity risk relating to the need to fund its hedging activities. The Group is exposed to credit risk due to its exposure to trading counterparties and as a result of the investment of the proceeds from the issuance of structured investment products in bonds and other ﬁxed income instruments. In addition, Leonteq is exposed to operational risks including processing errors, legal and regulatory risks, and risks related to its IT infrastructure.

Risk measures

The Group measures risk at the level of individual positions and at portfolio level. Sensitivity, stress and statistical loss measures are calculated and recorded at position level, facilitating the analysis of results across multiple dimensions, such as entities, trading portfolios or individual asset classes.

MORE THAN 300 DAILY STRESS

TESTS ARE PERFORMED AND SCENARIOS ARE

Leonteq does not use any approximation techniques to calculate risk sensitivities or the results of sensitiv-ity and stress scenarios. A full revaluation of all positions, including derivatives priced using Monte Carlo techniques, is used for risk-related calculations. The resulting risk exposure and limit consumption for all established risk limits is reported to senior management on a daily basis. Risk limits are applied to credit exposures and market risk sensitivities.

Stress testing

CALCULATED TO ENSURE THAT

THE TRADING BOOK REMAINS

WITHIN THE DEFINED RISK

Daily stress testing of the Group's portfolios is performed in order to monitor and control exposures to various risks. More than 300 daily stress tests are performed and scenarios are calculated to ensure that the trading book remains within the deﬁned risk limits. Speciﬁc stress scenarios have been deﬁned for changes in secu-rity prices (including changes in underlying parameters such as volatility, correlation and dividend parameters), foreign exchange rates and interest rates, as well as for the Group's credit exposures.

Sensitivity analysis

LIMITS

The Group calculates the sensitivity to changes in the value of individual positions and the sensitivity of the entire portfolios to changes in underlying risk factors such as share prices, volatility, interest rates and credit spreads.

Risk concentration

Management considers that a risk concentration exists when an individual or group of ﬁnancial instruments is exposed to changes in the same risk factor and that exposure could result in a signiﬁcant loss based on plausible adverse future market developments. Management monitors and reviews credit risk concentra-tions, as well as residual risks such as vega, correlation, dividend and gap risk, on a regular basis and takes corrective actions to ensure exposures are reduced to an acceptable level. s

Proﬁt and loss analysis

The Group performs daily proﬁt and loss analysis and reports economic revenues on a consolidated as well as individual trading book level to senior management. Economic revenues consist of sales and trading income earned and are considered as recognised at the trade date without applying IFRS revenue recogni-tion rules. Economic revenues do not include certain other income components such as partner project cost reimbursements. The below charts show the weekly economic revenues for 2020 and 2019.

Leonteq achieved a strong start to the 2020 ﬁnancial year with high levels of client activity and a positive trading result on the back of increased volatility towards the end of February. In March and April, the global spread of Covid-19 and the oil price shock resulted in exceptionally high levels of volatility and turmoil in the global capital markets that affected all asset classes underlying structured products. In this environment, Leonteq generated a signiﬁcant increase in turnover and fee income. At the same time, Leonteq recorded hedging-related losses driven by the oil price shock in March (approximately CHF -20 million) as well as the widespread and unexpected cancellation of previously announced dividend payments, which affected cashﬂows from shareholdings owned by Leonteq for hedging purposes (approximately CHF -38 million). In addition, Leonteq recorded a signiﬁcant increase in hedging-related costs as market risk exposures changed rapidly in an increasingly illiquid hedging market which were only partially offset by positive hedg-ing contributions from Leonteq's structural long volatility position. In May and June, the capital markets recovered signiﬁcantly, with volatility levels returning to normal.

CHALLENGING H1 2020; STABILISED REVENUES H2 2020; RECORD Q4 2020

The start to the second half of 2020 was characterised by slower-than-usual summer months that extended well into September. In October, client demand continued to be lower than in the prior-year period, reﬂecting investor uncertainty on the back of concerns about a second wave of Covid-19 and in the run-up to the US election. From mid-November onwards, client activity recovered signiﬁcantly and remained strong until the start of the holiday period at year-end resulting in the best quarter performance in Leonteq's history with revenues totalling CHF 80 million.

Weekly economic revenues | 2020 (CHFm)

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Weekly economic revenues | 2019 (CHFm)

20 15 10 5 0 -5

Jan

FebMar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Market risk

Audited | Market risk is the risk of loss resulting from adverse movements in the market price or model price of ﬁnancial assets. The Group distinguishes between ﬁve types of market risk:

• Equity risk, i.e. the risk of adverse movements in share prices and related derivatives;
• Interest rate risk, i.e. the risk of adverse movements in the yield curve and corresponding movements in the valuation of ﬁxed income-based assets;
• Foreign exchange, i.e. the risk of adverse movements in currency exchange rates and related derivative instruments;
• Credit spread risk, i.e. the risk of adverse movements in credit spreads
• Commodity risk, i.e. the risk of adverse movements in commodity prices and related derivatives.

Monitoring of market risk

Equity, interest rate, foreign exchange, credit spread and commodity risks are monitored and controlled through the daily calculation of various risk measures:

• Delta risk measures the impact of a change in the price of the underlying (equity, precious metal or commodity) and the impact on proﬁt and loss is measured based on a 1% increase in the price of all underlying securities.
• Vega risk is the sensitivity of the derivative value with respect to changes in the implied volatility of an underlying (equity, precious metal or commodity) and the impact on proﬁt and loss is measured based on a 1% normalised shock on the implied volatility in absolute terms for all underlyings. A normalised volatility shock is deﬁned by a term structure of shocks with shocks decaying by 1/sqrt(t), with caps and ﬂoors applied at the short and long end.
• Correlation risk measures the impact on the derivative value of changes in implied correlation between underlying pairs and the impact on proﬁt and loss is measured based on a change in implied correlation of 1 percentage point in absolute terms for all underlying pairs.
• Dividend risk measures the impact on the derivative value of changes in the expected dividend and the proﬁt or loss impact is measured based on a change in dividend of -10% in relative terms for all underlyings.
• Foreign exchange risk measures the impact of a change in currency prices. The impact on proﬁt and loss is measured for a 1% change in the value of all currencies against the Swiss franc. Sensitivities are further classiﬁed into G10 currencies (FX G10) and non-G10 currencies (FX EM).
• Credit spread risk measures the impact of a change in the price of the underlying bond as a result of a change in the credit spread of the issuer and is measured based on the change in credit spreads of 10 basis points. Sensitivities are divided between credit-linked products (CS10 Credit-linked products), corporate and ﬁnancial institution exposures (CS10 Corporations and banks), and governments, agen-cies and supranationals (CS10 Governments and agencies).
• Interest rate risk measures the impact of a parallel shift in the yield curve and the impact on proﬁt and loss is measured based on a change in all the yield curves of 1% (DV100) for the G10 interest rates (IR G10) and the non-G10 interest rates (IR EM).
• IR vega risk is the sensitivity of the derivative value with respect to changes in the implied volatility of interest rates and the proﬁt or loss impact is measured based on a change in the normal implied volatility of +1 basis point for all interest rate curves.

Sensitivity analysis

Equity delta	36	65
Precious metal delta	36	134
Commodity delta	13	(43)
Equity vega	5,067	2,294
Precious metal vega	(16)	16
Commodity vega	32	223
Equity correlation	(7,723)	(4,570)
Equity dividend	(11,634)	(3,480)
FX G10 delta	(604)	(44)
FX EM delta	(156)	46
CS10 Credit linked products	231	437
CS10 Government and agencies	(626)	(1,866)
CS10 Corporations and banks	(553)	(1,039)
IR G10 DV100	(10,102)	(7,868)
IR EM DV100	195	(444)
IR vega	57	(107)
Impact on equity
Risk factor
FX G10 delta	3,097	2,905
CS10 Government and agencies	(1,088)	(81)
CS10 Corporations and banks	(6,714)	(3,836)

As of 31 December 2020, the Group had the following exposures relating to its ﬁnancial assets and liabilities.

Impact on the income statement

CHF thousand

31.12.2020

31.12.2019

Risk factor

CHF thousand

31.12.2020

31.12.2019

In 2020, the risk proﬁle of products issued by Leonteq and its partners changed signiﬁcantly, primarily as a result of barriers being hit in products with these features and also as a result of increases in implied volatil-ity that have not returned to the levels seen at the end of 2019. In addition, new products issued to clients during this period tended to have different risk characteristics than the existing portfolio. The resulting changes in the risk characteristics of the structured products issued by Leonteq and its partners have increased Leonteq's exposure to certain risks, including equity correlation and equity dividend risks. Further, Leonteq's continued investments into somewhat longer-term bonds as part of its investment port-folio have resulted in an increase in credit spread sensitivities, especially as they relate to bonds issued by banks and corporate issuers.

The Group operates a branch in Guernsey (Leonteq Securities AG, Guernsey Finance Branch), whose pri-mary function is the management of a portfolio of mainly US dollar denominated bonds. Consequently, the branch's functional currency is the US dollar. As of 31 December 2020, the branch was funded with capital of USD 150 million as well as a long-term intra-group loan of USD 200 million, resulting in a US dollar expo-sure for the Group of approximately USD 350 million. This is an increase of USD 50 million during 2020. Sensitivities between the US dollar and Swiss franc are the primary contributor affecting the Group's equity and are shown in the above table.

The Group invests a portion of the proceeds from own product issuance in mid-term high-quality bonds issued by corporates and ﬁnancial institutions. This investment portfolio is measured at fair value through other comprehensive income (FVOCI). Bonds measured at FVOCI are presented as "ﬁnancial investments measured at fair value through other comprehensive income". Credit spread sensitivities relating to this FVOCI portfolio are shown in the above table. s

THE GUERNSEY BRANCH HAD A US DOLLAR EXPOSURE OF APPROXIMATELY USD 350 MILLION

Stress analysis

Audited | The Group reports the impacts on its income statement when the following relevant historical stress scenarios are applied to its portfolio:9/11 is a 1-day crash scenario that happened on 11 September 2001 after the terrorist attack on the

Twin Towers in New York. Equity prices fell signiﬁcantly and equity volatilities increased.

Rally is a 1-day rally scenario that happened two weeks after 11 September 2001, on 24 September 2001.

Equity prices increased and equity volatilities decreased.

The following tables give an indication of the overall risk exposure as of 31 December 2020 and 31 December 2019.

Structured products

31 December 2020	Vol. -5%	Vol. -2%	Vol. 0%	Vol. +2%
CHF thousand
Spot -10%	(51,324)	(25,718)	(10,475)	2,982
Spot -5%	(28,626)	(11,652)	(563)	10,378
Spot -2%	(26,815)	(10,461)	(4)	10,288
Spot 0%	(25,040)	(10,245)	-	9,944
Spot +2%	(21,813)	(9,250)	338	10,043
Spot +5%	(14,198)	(5,097)	3,033	12,082
Spot +10%	1,043	6,703	13,107	21,221
31 December 2019	Vol. -5%	Vol. -2%	Vol. 0%	Vol. +2%
CHF thousand
Spot -10%	(69,844)	(31,161)	(8,879)	10,904
Spot -5%	(31,976)	(12,740)	(808)	10,689
Spot -2%	(17,438)	(7,025)	(95)	6,967
Spot 0%	(10,299)	(4,407)	-	4,666
Spot +2%	(3,020)	(1,345)	437	3,151
Spot +5%	9,924	4,855	3,701	4,077
Spot +10%	30,811	20,542	15,589	12,805
Pension products
31 December 2020	Vol. -20bp	Vol. -10bp
CHF thousand
Spot -50bp	(1,980)	126
Spot -25bp	(2,554)	(1,020)
Spot 0bp	(375)	(197)
Spot +25bp	2,320	1,146
Spot +50bp	3,442	1,571
31 December 2019	Vol. -20bp	Vol. -10bp
CHF thousand
Spot -50bp	570	811
Spot -25bp	1,963	819
Spot 0bp	3,591	1,392
Spot +25bp	3,907	1,476
Spot +50bp	2,648	480

Vol. +5%	Vol. +10%
20,574	43,302
26,053	48,731
25,512	48,747
24,885	48,856
24,840	49,757
26,821	52,786
35,681	62,831
Vol. +5%	Vol. +10%
35,582	64,242
25,977	46,662
17,746	34,297
12,721	27,433
9,291	21,938
7,491	17,202
12,414	19,189
Vol. 0bp	Vol. +10bp	Vol. +20bp
1,708	2,967	4,018
95	989	1,746
218	462
398	(69)	(349)
262	(660)	(1,312)
Vol. 0bp	Vol. +10bp	Vol. +20bp
1,061	1,359	1,716
173	(147)	(241)
-	(860)	(1,356)
(179)	(1,296)	(2,028)
(1,055)	(2,144)	(2,901)
s

Credit risk

Audited | Credit or default risk is deﬁned as the general risk of ﬁnancial loss occurring if a counterparty or an issuer of a ﬁnancial security does not meet its contractual obligations. The Group distinguishes between the following types of credit risk:

• Counterparty credit risk is the risk of the counterparty defaulting on a derivative instrument that has a positive replacement value after consideration of collateral;
• Issuer risk is the risk of default by the issuer of a debt instrument held as a direct position or as an underlying of a derivative;
• Country risk is the risk of ﬁnancial loss due to a country-speciﬁc event.

Monitoring of credit risk

Leonteq is exposed to credit risks related to over-the-counter (OTC) derivatives and securities lending and borrowing activities with counterparties. It is also exposed to credit risks through the investment of pro-ceeds from the issuance of structured investment products in bonds or other ﬁxed income instruments, as well as the exposure incurred as a result of the issuance of credit-linked notes. Counterparty and country risk limits are set by management and reviewed regularly by the Risk Committee of the Board of Directors. Exposure to counterparties resulting from the Group's OTC derivatives and securities lending and borrowing activities is typically mitigated through the use of mark-to-market collateral and close-out netting arrange-ments. Investments in bonds or other ﬁxed income instruments are subject to additional limits.

Counterparty exposures

CHF million

31.12.2020 Exposure

31.12.2019 Exposure

OTC	13.4	23.5
SLB	101.1	46.3
Total	114.5	69.8
Investment portfolio

The Group has primarily invested the proceeds from own product issuance in short- to mid-term high-qual-ity bonds issued by corporations and ﬁnancial institutions, as well as central governments, organisations supported by those governments, and supranational organisations. A comprehensive overview of the invest-ment portfolio is provided in the following tables:

CHF million

Maturity

Total 31.12.2020

Total 31.12.2020 in %

0 - 12 months

12 - 24 months

24 - 36 months

36 - 48 months

48 - 60 months

>60 months

Governments/public sector	218.7	237.3	177.8	6.0	134.1	55.7	829.6	33.8%
bodies/supranational agencies
of which Aaa	163.6	144.0	150.8	6.0	93.6	31.9	589.9	24.0%
of which Aa1-Aa3	55.1	93.3	27.0	-	35.2	16.1	226.7	9.2%
of which A1-A3	-	-	-	-	5.3	7.7	13.0	0.5%
Corporations/institutions	24.0	75.2	101.4	227.0	281.9	427.0	1,136.5	46.3%
of which Aaa	-	7.4	-	-	56.3	65.8	129.5	5.3%
of which Aa1-Aa3	13.4	14.6	26.5	78.8	100.3	173.4	407.0	16.6%
of which A1-A3	1.6	53.2	65.1	127.0	125.3	137.0	509.2	20.7%
of which Baa1-Baa3	9.0	-	9.8	21.2	-	50.8	90.8	3.7%
Banks	19.8	66.3	51.8	84.6	145.7	122.7	490.9	20.0%
of which Aaa	-	-	-	-	24.7	7.4	32.1	1.3%
of which Aa1-Aa3	19.8	39.0	29.2	36.5	23.4	22.9	170.8	7.0%
of which A1-A3	-	27.3	22.6	48.1	97.6	32.4	228.0	9.3%
of which Baa1-Baa3	-	-	-	-	-	60.0	60.0	2.4%

Total

262.5

378.8

331.0

317.6

561.7

605.4

2,457.0

100%

CHF million

Maturity

Total 31.12.2019

0 - 12

months

12 - 24 months

24 - 36 months

36 - 48 months

48 - 60 months

>60 months

Total 31.12.2019 in %

Governments and agencies1

77.0

456.9

341.2

167.2

51.1

0.0

1,093.4 45.5%

of which Aaa
43.2
303.9
216.2
123.5
39.3
0.0
726.1 30.2%
of which Aa1-Aa3
33.8
153.0
125.0
43.7
0.0
0.0
355.5 14.8%
of which A1-A3

0.0

11.8

0.0

11.8 0.5%

Corporations/institutions

11.1

56.1

202.3

175.1

209.3

220.7

874.6 36.4%

of which Aaa
-
-
28.5
0.7
14.3
60.4
103.9 4.3%
of which Aa1-Aa3
15.6
20.3
45.6
56.2
41.6
74.2
253.5 10.6%
of which A1-A3
5.9
35.8
126.8
101.5
138.5
79.3
487.8 20.3%
of which Baa1-Baa3
-
-
1.4
6.0
14.9
6.8
29.1 1.2%
of which B1-B3

(10.4)

0.0

10.7

0.0

0.3 0.0%

Banks

57.9

39.1

106.4

63.0

96.5

71.4

434.3 18.1%

of which Aa1-Aa3
24.9
12.6
76.0
29.4
26.3
34.4
203.6 8.5%
of which A1-A3
22.9
26.5
12.3
28.6
61.3
32.1
183.7 7.6%
of which Baa1-Baa3

10.1

Total

146.0

- 552.1

18.1

5.0

8.9

4.9

47.0 2.0%

649.9

405.3

356.9

292.1

2,402.3 100.0%

Includes bonds issued by governments, public sector bodies and supranational agencies.

Operational risk

Operational risk is the risk of losses occurring due to inadequate or failed internal processes, people and systems or due to external factors. Operational risk includes the risk of losses due to failures in the Group's operational processes, it's IT system and issues related to legal and compliance. Losses can take the form of direct ﬁnancial losses, regulatory sanctions or lost revenues, e.g. due to the failure of a service or system. Such events may also lead to reputational damage that could have longer-term ﬁnancial consequences.

A BROAD

OPERATIONAL RISK FRAMEWORK HAS BEEN PUT IN PLACE TO MANAGE

Operational risk is limited by means of organisational measures, automation, internal control and security systems, written procedures, legal documentation, loss mitigation techniques and a business continuity plan overseen by management, among other measures. Special attention is paid to the key performance indicators of the Group's core risk management system. All securities purchases are executed through central trading desks and the size and quality of the trades are reviewed by traders. Positions are reconciled on a daily basis by the back ofﬁce. However, operational risk cannot be entirely mitigated.

AND CONTROL OPERATIONAL RISK, WHICH IS CONSIDERED ONE

OF THE MAJOR RISKS FOR THE

GROUP

Leonteq's management considers operational risk to be one of the major risks to which the Group is exposed. A broad Operational Risk Framework has therefore been put in place to manage and control operational risk. Within that framework, any operational risk is "owned" by management as the ﬁrst line of defence. Operational Risk Control independently monitors the effectiveness of operational risk manage-ment and oversees operational risk-taking activities. The Board of Directors determines the risk appetite for signiﬁcant sources of operational risk. Management performs its own periodic assessments of the opera-tional risk proﬁle within its areas of responsibility. As part of this process, unmitigated risks and mitigation actions are logged in a Group-wide inventory. Operational Risk Control independently reviews the assess-ments produced by management and collates the Group's overall operational risk proﬁle to determine whether it is in line with the risk appetite established by the Board of Directors. Operational events are analysed to determine their root causes, and adequate and sustainable mitigation actions are deﬁned. s

Business continuity management

The Group maintains a comprehensive business continuity management (BCM) plan, including contingency measures for a number of potential events and scenarios that could affect the Group's ability to operate. These events include potential IT failures, damage to its premises, natural disasters and diseases, including pandemics.

Key elements of the Group's BCM plan are the establishment of a crisis management team, including the CEO and COO, the deﬁnition of communication plans for internal and external stakeholders, IT and infrastructure redundancies, and a ﬂexible IT set-up that allows nearly all Leonteq employees to work from home or other locations without their ability to perform essential tasks being affected.

The Group's BCM plans were implemented early on as a result of the Covid-19 pandemic, with the priority being to safeguard the health and safety of employees, clients and other stakeholders, as well as protecting the business and proﬁtability. All of Leonteq's ofﬁces were required to close or operate with signiﬁcantly fewer employees through much of 2020. Employees were able to work from home for extended periods of time without any disruptions. Speciﬁcally, Leonteq did not experience any issues relating to its trading and risk management activities, with all hedging and risk management activities continuing uninterrupted.

BCM MEASURES WERE IMPLEMENTED EARLY ON AND LEONTEQ CONTINUED TO PROVIDE FULL CLIENT SERVICE AT ALL TIMES

Working situations have been actively addressed by the company on an ongoing and proactive basis to ensure employee safety and alignment with local government recommendations. Leonteq set up full home ofﬁce capabilities, including sophisticated trading and IT development set-ups, early on. This meant that once lockdowns were imposed staff was able to seamlessly transition to working from home from one day to the next. As some governments eased restrictions over the summer months, Leonteq also took a phased approached to bringing staff back to its ofﬁces, ﬁrst with only critical functions working on site and then moving to full team A/B split operations. The sophisticated remote access set-up that Leonteq has in place has allowed for swift transition throughout the year between on site and remote working options.

Cyber security risks

Technical defences

The Group follows state-of-the-art cyber security practices by implementing multiple layers of technical defences against unauthorized access from internal or external sources, as illustrated in detail in the chart below. This includes the use of next-generation ﬁrewalls, intrusion detection systems and distributed denial of service protection at the network perimeter, together with internal counter-measures. This conﬁguration is designed to ensure that no part of the Group's network is exposed to cyber-security risks due to the fail-ure of any single component and there is no direct route to its data without passing through multiple checks.

Lines of defence of Leonteq's cyber security layers

Distributed Denial of Service (DDoS) protection

Internet

Intrusion detection and protection system

Proxies (web trafﬁc) Barracuda (emails)

Outer ﬁrewall

DMZ

Inner ﬁrewall

Internal network & systems

End Point Protection (antivirus running on PCs)

Network Access Control (NAC)

Security Operations Centre (SOC)

Governance defences

Technical defences alone are not sufﬁcient to ensure that safety of digital assets in a commercial environ-ment. To enable the Group to meet stringent regulatory and security practices, technical defences are therefore backed by strong and regular governance routines including:

• Internal and external audits of cyber defences and routines to ensure compliance with the Group's requirements and foster good practices;
• Regular penetration tests, which are carried out in the Group's general environment on a routine basis and also when the Group launches a new digital service;
• Internal checks and reviews that have been established to verify that the Group's services are correctly conﬁgured, including exception handling;
• Regular user awareness and training sessions to ensure that employees, or staff acting on behalf of the Group, understand what is regarded as acceptable or risky behaviour, together with strategies to work within a safe environment.

External certiﬁcations

The Group's processes and procedures are subject to annual external validation by two leading international organizations.

The Group's internal control system, which comprises controls relating to its business, operational and IT processes as well as controls of information security, is audited on an annual basis in accordance with ISAE 3402. A comprehensive report documenting these controls is produced on an annual basis and is certiﬁed by means of an external audit.

The Group's BCM plan, which covers its disaster recovery and crisis management procedures, is audited in accordance with ISO 22301.2012. This audit is conducted annually and covers the planning, implementation and operation of the Group's plan to protect against, reduce the likelihood of, prepare for, respond to, and recover from disruptive incidents, if and when they arise.

Other risks

Audited | The Group is also exposed to a number of other risks, including reputational risk, model risk and tax risk.

Reputational risk is the risk of a potential loss of reputation due to a ﬁnancial loss or any other real or per-ceived event with a negative impact on reputation. In particular, this includes the risk arising from any cases of employee misconduct. The risk framework implemented by the Group is designed to identify, quantify and reduce primary and consequential risks that could have an adverse impact on its reputation. Leonteq believes that its reputational risk is further mitigated through strict compliance controls and a culture of ownership and responsibility across all levels of the Group. This is reinforced by a systematic and transparent communication policy towards all stakeholders.

Model risk is the risk of ﬁnancial loss due to inappropriate model assumptions or inadequate model usage. In Leonteq's business, signiﬁcant model risks may arise when models are used to value ﬁnancial securities and to calculate hedging ratios. The consequence of an inadequate model could be an incorrect valuation, leading to incorrect risk measurement and incorrect hedging positions, both of which could result in a ﬁnan-cial loss. Leonteq mitigates these risks through a comprehensive model validation process performed inde-pendently by the Risk Control department. The process includes the assessment of conceptual aspects, model implementation and integration into the risk management system, valuation results and best market practices, and it is concluded by the granting of a formal approval. Further validation is achieved through continuous monitoring of model performance in daily market operations.

Tax risk is the risk of losses arising from changes in taxation (derived from tax legislation and decisions by the courts), including the misinterpretation of tax regimes as well as the manner in which they may be applied and enforced. This also applies to new international tax laws that could have a negative impact on the taxation of structured products, making them unattractive to investors. Leonteq proactively manages and controls these risks. It usually asks the relevant tax authorities for written conﬁrmation of its inter-pretation of the relevant regulations (tax rulings) or seeks appropriate advice from professional local tax consultants. Tax risk is monitored by the Tax department, which takes an integrated view of tax risks for the entire Group.

Brexit: Leonteq does not expect that the UK's withdrawal from the EU will have a signiﬁcant impact on its business. Leonteq maintains ofﬁces both in the UK (London) and in the EU (Amsterdam, Paris, Frankfurt and Milan) and holds appropriate licenses to continue to serve its clients in the UK and the EU.

Interest Rate Benchmark Reform: Leonteq is in the process of preparing for the transition from LIBOR interest rates to other benchmark rates, which is expected to occur by the end of 2021 at the latest. Leonteq is well advanced in its preparations for the transition to the new benchmark rates and expects to be able to implement these new rates throughout its businesses in the course of 2021.

LIQUIDITY MANAGEMENT

Audited | The Group distinguishes between market liquidity risk, or the risk that it may not be able to sell or buy assets at fair value, and funding liquidity risk, or the risk that Leonteq may not have sufﬁcient cash or other liquid assets to meet its obligations as they fall due.

Market liquidity risk

Since the Group hedges its liabilities arising from issued structured investment products through the sale or purchase of derivatives or other ﬁnancial and non-ﬁnancial instruments, it is exposed to the risk that it may be unable to sell or buy such hedging assets at fair value to cover its liabilities for the corresponding structured investment products. Leonteq refers to this risk as market liquidity risk related to outstanding structured investment products. As the product buy-back price is linked to the price of unwinding the asset, market liquidity risk related to trading activities is limited. Measures to mitigate market liquidity risks related to trading include:

• Issuance of ﬁnancial instruments only on reasonably liquid underlying instruments (shares, bonds, freely convertible currencies and commodities) and markets;
• Diversiﬁcation of OTC hedging counterparties;
• Quotation of structured investment products, including a bid-ask spread that provides an adequate buffer for less liquid underlyings. The buffer between the value of the product using the current market value of illiquid underlyings and the prices at which Leonteq is willing to trade these products is needed in order to compensate for the possibility that it may not be able to hedge its liabilities at the current market prices of the illiquid underlyings.

Furthermore, Leonteq invests excess proceeds from the issuance of structured products in a high-grade bond investment portfolio managed by its Treasury department. Any market liquidity risk of the investment portfolio is not offset by structured investment products. Measures to mitigate market liquidity risks related to treasury activities include:

• Ensuring the investment universe comprises government and supranational agency credits with a high-grade credit rating as well as bonds issued by corporates and ﬁnancial institutions with an invest-ment-grade rating;
• Maintaining diversiﬁcation across countries and issuers;
• Specifying a minimum issue size;
• Deﬁning the maximum concentration per single issue.

Funding liquidity risk

Funding liquidity risk represents the risk that Leonteq will not be able to efﬁciently meet both expected and unexpected current and future cash ﬂow and collateral needs without its daily operations or the ﬁnancial condition of the Group being impacted. Funding consumption occurs mainly within Leonteq Securities AG, Zurich, and Leonteq Securities AG, Amsterdam Branch.

The Group is exposed to funding liquidity and reﬁnancing risk due primarily to the issuance of structured prod-ucts for the Group as well as its platform partners for whom the Group provides derivative hedges. Funding liquidity risk is the risk that the Group will not be able to efﬁciently meet both expected and unexpected liquid-ity ﬂows. In addition, Leonteq is required to post collateral with SIX to secure obligations relating to COSI® and TCM-issued products. The repatriation of certain offshore cash placements is subject to Swiss withholding tax. Leonteq therefore avoids using such unsecured liquidity held in the Guernsey and Amsterdam branches of Leonteq Securities AG to fund the purchase of securities needed to hedge market risks in Switzerland.

The liquidity management framework requires Leonteq to maintain sufﬁcient liquidity reserves across its locations, thus ensuring adequate liquidity during general market, industry-speciﬁc or Group-speciﬁc stress conditions. Under the framework, Leonteq is required to maintain certain levels of available or onshore liquidity, excluding funding that may not be repatriated to Switzerland. The framework metrics are indepen-dently veriﬁed by Risk Control each business day. In addition, the Risk Control department simulates the effects of various stress scenarios on the amount of funding required under those scenarios on a daily basis.

The framework requires that sufﬁcient liquidity be available in locations to cover their respective funding requirements. If Leonteq were to experience shortfalls in any aspect of its liquidity requirements, commit-ted credit facilities can be drawn on in conjunction with other reserve liquidity measures, as speciﬁed in the liquidity framework.

Maturity analysis of assets and liabilities

The following tables show the maturity analysis of the Group's ﬁnancial assets and liabilities. Financial assets are presented based on either the ﬁrst time period in which they can be contractually redeemed or, in the case of trading ﬁnancial assets (principally equity instruments with no contractual maturity), in the "up to 1 month" category, reﬂecting management's view of the liquidity characteristics of these instru-ments. Financial liabilities are presented based on the ﬁrst time period in which they are contractually redeemable.

As undiscounted cash ﬂows are not signiﬁcantly different from discounted cash ﬂows, the balances equal their carrying amount on the statement of ﬁnancial position, with the exception of other ﬁnancial assets and ﬁnancial liabilities designated at fair value through proﬁt or loss, ﬁnancial investments measured at fair value through other comprehensive income and trading ﬁnancial assets and liabilities.

With a higher amount of ﬁnancial assets redeemable within three months relative to ﬁnancial liabilities, Leonteq has a surplus of short-term liquidity. This gives the Group the ﬂexibility to repay its liabilities in the event of early redemptions of structured products due to unforeseen market movements. Assets with shorter durations are periodically renewed or rolled over. This ensures a constant funding match and facili-tates the adequate liquidity management of assets and liabilities.

CHF thousand

Due

Total 31.12.2020

Up to 1 month

1-3 months

3-12 monthsOver 12 months

Assets

Liquid Assets	215,645	-	-	-	215,645
Amounts due from banks	597,174	-	-	-	597,174
Amounts due from securities ﬁnancing transactions	4,188	-	-	-	4,188
Amounts due from customers	507,533	-	-	-	507,533
Trading ﬁnancial assets	3,226,572	5,799	16,808	161,933	3,411,112
Positive replacement values of derivative ﬁnancial instruments	168,253	2,289,429	1,107,837	1,105,490	4,671,008
Other ﬁnancial assets designated at fair value	1,830	25,209	226,147	661,565	914,750
through proﬁt or loss
Financial investments measured at fair value	-	-	48,849	1,653,802	1,702,651
through other comprehensive income
Accrued income	13,873	5,945	-	-	19,818
Total ﬁnancial assets	4,735,067	2,326,382	1,399,640	3,582,790	12,043,880
Liabilities
Amounts due to banks	380,636	-	-	-	380,636
Liabilities from securities ﬁnancing transactions	1,146,648	-	-	-	1,146,648
Amounts due to customers	812,495	-	-	-	812,495
Trading ﬁnancial liabilities	199,247	-	-	1,297	200,544
Negative replacement values of derivative ﬁnancial instruments	151,551	947,693	1,248,370	1,711,318	4,058,933
Other ﬁnancial liabilities designated at fair value	1,249,651	1,181,513	860,003	1,803,504	5,094,672
through proﬁt or loss
Lease liability	-	-	9,528	47,998	57,526
Accrued expenses	99,790	42,767	-	-	142,557
Total ﬁnancial liabilities	4,040,018	2,171,973	2,117,901	3,564,118	11,894,011

CHF thousand	Due	Total
31.12.2019
Up to	1-3	3-12	Over
1 month	months	months	12 months
Assets
Liquid Assets	130,891	-	-	-	130,891
Amounts due from banks	515,826	-	-	-	515,826
Amounts due from securities ﬁnancing transactions	48,883	-	-	-	48,883
Amounts due from customers	394,938	-	-	-	394,938
Trading ﬁnancial assets	2,034,867	5,950	10,576	103,692	2,155,085
Positive replacement values of derivative ﬁnancial instruments	48,998	1,668,929	472,038	801,781	2,991,746
Other ﬁnancial assets designated at fair value	1,933	21,220	144,012	1,320,156	1,487,321
through proﬁt or loss
Financial investments measured at fair value	-	30,055	-	1,070,295	1,100,350
through other comprehensive income
Accrued income	16,517	7,079	-	-	23,596
Total ﬁnancial assets	3,192,853	1,733,233	626,626	3,295,924	8,848,636
Liabilities
Amounts due to banks	232,210	-	-	-	232,210
Liabilities from securities ﬁnancing transactions	259,319	-	-	-	259,319
Amounts due to customers	591,304	-	-	-	591,304
Trading ﬁnancial liabilities	432,606	-	-	1,301	433,907
Negative replacement values of derivative ﬁnancial instruments	29,197	687,703	556,355	1,253,819	2,527,074
Other ﬁnancial liabilities designated at fair value	986,661	797,698	1,067,479	1,292,504	4,144,342
through proﬁt or loss
Lease liability	-	-	9,633	53,548	63,181
Accrued expenses	125,098	53,614	-	-	178,712
Total ﬁnancial liabilities	2,656,395	1,539,015	1,633,467	2,601,172	8,430,049
s

CAPITAL MANAGEMENT

LEONTEQ

ENGAGES IN ROBUST CAPITAL

PLANNING PROCESSES BASED

ON A DEFINED SET OF STRESS

The Swiss Financial Institutions Act (FinIA) and the Financial Institutions Ordinance (FinIO) entered into force on 1 January 2020. FinIA regulates the licensing requirements and further organisational rules for certain ﬁnancial institutions, including securities dealers such as Leonteq, which are now designated as secu-rities ﬁrms. The new regime distinguishes between account-holding and non-account-holding securities ﬁrms for the application of capital requirements. Securities ﬁrms that do not hold accounts for clients are no longer subject to the Capital Adequacy Ordinance but must permanently hold capital of at least one quarter of the ﬁxed costs of the last annual ﬁnancial statement, up to a maximum of CHF 20 million. Leonteq does not hold client accounts and is thus no longer subject to the requirements of the Capital Adequacy Ordinance. Under the new regulatory framework for securities ﬁrms, Leonteq signiﬁcantly exceeded its regulatory capital requirement of CHF 20 million as of 31 December 2020.

SCENARIOS

Leonteq engages in a robust capital planning process based on a deﬁned set of stress scenarios in order to ensure that shareholders' equity is sufﬁcient to cover potential losses in the event of severe adverse market shocks or other events. The Group's deﬁned stress scenarios include the simulated combined effect of a variety of market and business events, including potential losses related to equity market shocks, interest rate changes, foreign exchange rate movements, credit losses and operational losses, as well as adverse changes to the business environment. These potential losses are then compared to the Group's shareholders' equity in order to ensure that a signiﬁcant buffer is maintained in each deﬁned scenario.

LEONTEQ AG ANNUAL REPORT 20E20 TAROPROC

ECNANREVOG

Corporate Governance Framework Shareholders

102

107

Board of Directors Executive Committee Additional information

CORPORATE GOVERNANCE

Leonteq's corporate governance complies with internationally accepted standards, and the Group recognises the importance of good corporate governance. Leonteq provides transparent disclosures about its governance to help stakeholders assess the quality of the Group's corporate governance and to assist investors in their investment decisions.

Over the past four years, the Board of Directors has signiﬁcantly improved the company's governance framework and strengthened the independence, skills and diversity of the Board of Directors and its Committees. The Remuneration Committee became the Nomination and Remuneration Committee, the Audit Committee and the Risk Committee were combined, and all committees were newly composed so that all or at least the majority of their members are independent directors. Following the streamlining of the structure of the Executive Committee in 2017 and the appointment of a new CEO in 2018, the redesign-ing of Leonteq's compensation system for the Executive Committee in 2019 marked another milestone in this process and serves as the starting point for how the Company wants to shape its business in the future and position it for success.

Key corporate governance developments for the Group in 2020 included:

• The selection and nomination of Philippe Weber for election as a new independent member of the Board of Directors at the Annual General Meeting 2020. Philippe Weber is a seasoned capital markets and corporate legal expert with extensive business experience;
• The announcement that Hans Isler will not stand for re-election at the Annual General Meeting 2020 after serving as a member of Leonteq's Board of Directors since 2012;
• The combination of the Audit Committee with the Risk Committee with a view of streamlined workﬂows;
• The Annual General Meeting 2020 was held without shareholders being physically present, in accor-dance with the requirements deﬁned by the Swiss Federal Council to combat the spread of the coronavirus;
• The appointment of Markus Schmid to the newly created role of Chief People Ofﬁcer;
• The appointment of Alessandro Ricci as new Head Investment Solutions, succeeding David Schmid, who left the company;
• The creation of a Treasury Committee as a new standing committee of the Executive Committee.

Corporate governance framework

Leonteq's corporate governance framework comprises its governing bodies and its corporate governance policies, which deﬁne the competencies of the governing bodies and other corporate governance rules and procedures.

Leonteq's governing bodies are:

• The General Meeting
• The Board of Directors
• The external auditors

Shareholders elect the members of the Board of Directors and the independent external auditors on an annual basis and approve statutory resolutions at the Annual General Meeting. Those statutory resolutions include the approval of the consolidated ﬁnancial statements, amendments to the Articles of Association, and the approval of the total compensation of members of the Board of Directors and the Executive Committee. The Board is responsible for the overall strategic direction, supervision and control of the Group and appoints the members of the Executive Committee. The Executive Committee is responsible for the day-to-day management of the Group's business and for developing and implementing business plans.

Leonteq's corporate governance policies comprise the Articles of Association and the Organisational Management Regulations. The Articles of Association deﬁne the purpose of the business, the capital structure and the basic organisational framework. The Organisational Management Regulations deﬁne the organisational structure of the Group, the responsibilities and areas of authority of the Board of Directors and its Committees, the competencies of the Executive Committee and its Committees, and the relevant reporting procedures. Further internal policies deﬁne the Group's standards of business conduct and the ethical values that the Board of Directors and all employees are required to follow, including adherence with applicable laws and regulations.

Corporate governance framework

General Meeting

Board of Directors

Audit & Risk Committee

Nomination & Remuneration Committee

Executive Committee

Product Approval	Risk	Treasury	Service Line
Committee	Committee	Committee	Committee

Business Lines

Service Lines

Investment Solutions

Insurance & Wealth Planning Solutions

Finance & Corporate Services

Risk

IT & Operations

Legal & ComplianceHuman Resources

Leonteq is active in the ﬁnance and technology sector with a focus on the structured products segment. The Group is managed on the basis of business and service lines and comprises Investment Solutions, Insurance & Wealth Planning Solutions, Finance & Corporate Services, IT & Operations, Risk, Human Resources and Legal & Compliance.

Leonteq is headquartered in Zurich, Switzerland, and together with its subsidiary Leonteq Securities AG, which has an additional ofﬁce in Geneva, is regulated by the Swiss Financial Market Supervisory Authority (FINMA). Leonteq Securities AG has branch ofﬁces in Guernsey, regulated by the Guernsey Financial Service Commission, and Amsterdam, registered with the Netherlands Authority for the Financial Markets (AFM). The Group accesses the European market through Leonteq Securities (Europe) GmbH (hereinafter referred to as Leonteq Europe), which is domiciled in Germany and is authorised by the German Federal Financial Supervisory Authority (BaFin). Leonteq Europe has exercised passporting rights to access the markets of other countries in the European Economic Area. Leonteq Europe has branch ofﬁces in London and Paris and, since October 2020, in Milan. Leonteq also has an ofﬁce in Monte Carlo, Leonteq Securities (Monaco) SAM, which is regulated by the Commission for the Control of Financial Activities (CCAF). Leonteq accesses the Asian market through its ofﬁces in Hong Kong, Singapore and Tokyo. Leonteq Securities (Hong Kong) Ltd. operates under the licence granted to it by the Securities and Futures Commission (SFC) of Hong Kong. Leonteq Securities (Singapore) Pte Ltd. operates under the capital markets licence granted by the Monetary Authority of Singapore (MAS). Leonteq Securities (Japan) Ltd. is authorised and regulated by the Financial Services Agency (FSA) of Japan. At the end of 2020, Leonteq obtained the necessary regu-latory approvals from the Dubai Financial Services Authority (DFSA) to operate in the Middle East through its Leonteq (Middle East) Ltd in Dubai.

Leonteq AG is the Swiss holding company responsible for the overall management of the Leonteq Group.

The registered shares of Leonteq AG are traded on the main standard of SIX Swiss Exchange in Zurich (security no. 19089118, ISIN CH0190891181, symbol LEON). On 31 December 2020, the Company's mar-ket capitalisation was CHF 664 million.

Leonteq operates in highly regulated markets and complies with strict regulatory standards. The Group's legal entity structure shown in the chart below as of 31 December 2020 is in line with its business opera-tions and regional footprint.

LEONTEQ AG

Zurich

Leonteq Securities AG, Guernsey Branch

Leonteq Securities AG,

Guernsey

Finance Branch

Leonteq Securities AG, Amsterdam

Branch

Holding company

Issuance entity

Investment portfolio entity

Trading hub & Sales ofﬁce

Sales Ofﬁce

The registered ofﬁce and share capital of each subsidiary as of 31 December 2020 is listed in the table below:

Name

Registered ofﬁce

Currency

Capital

Leonteq Securities AG1

Europaallee 39

CHF

15,000,000

8004 Zurich, Switzerland

Leonteq Securities (Europe) GmbH2

Goetheplatz 2

EUR

200,000

60311 Frankfurt am Main, Germany

Leonteq Securities (Hong Kong) Ltd.

Suite 2802, 28th ﬂoor, Prosperity Tower,

HKD 10,000,000

39 Queen's Road Central, Central, Hong Kong

Leonteq Securities (Japan) Ltd.

Ark Hills South Tower 9F,

JPY 312,500,000

1-4-5 Roppongi, Minato-ku, Tokyo, Japan

Leonteq Securities (Monaco) SAM

Villa Les Aigles,

EUR

500,000

15, Avenue d'Ostende, 98000 Monaco

Leonteq Securities (Singapore) Pte Ltd.

8 Marina View, #36-03/04,

SGD 1,000,000

Asia Square Tower 1, Singapore 018960

Leonteq (Middle East) Ltd.

Gate Precinct Building 5, Unit Precinct 7th ﬂoor - Unit 702, DIFC, United Arab Emirates

USD 3,000,000

1 Including branches in Guernsey (Block F, Hirzel Court, St Peter Port, Guernsey GY1 2NQ, Channel Islands) and in Amsterdam (ITO Tower, Gustav Mahlerplein 66-A, 1082 MA Amsterdam, Netherlands).
2 Including branches in Milan (Via Pietro Paleocapa, 5, 20121 Milano, Italy), London (108 Cannon Street, London EC4N 6EU, Great Britain) and Paris (80, avenue Marceau, 75008 Paris, France).

SHAREHOLDERS

Capital structure

Leonteq's total issued share capital as of 31 December 2020 amounted to CHF 18,934,097, divided into 18,934,097 registered shares, each with a nominal value of CHF 1.00. All registered shares are fully paid-in and entitled to a dividend. Each share carries one vote. No preferential rights or similar rights are attached to the shares. Leonteq does not have any participation certiﬁcates outstanding and no proﬁt-sharing cer-tiﬁcates are outstanding or have been issued in the past. The registered shares of Leonteq AG (security no. 19089118, ISIN CH0190891181, symbol LEON) are listed on the main standard of SIX Swiss Exchange and are included in the Swiss Performance Index SPI®.

Changes in capital structure

Effective 3 August 2018, the share capital of Leonteq AG was increased by 2,989,593 shares with a nominal value of CHF 1.00 each, resulting in a share capital increase of CHF 2,989,593. Total capital subsequently amounted to CHF 18,934,097, consisting of 18,934,097 registered shares with a nominal value of CHF 1.00 each, with the shares being fully paid-in. No further changes to the capital structure of Leonteq occurred between 2017 and end-2020.

Authorised capital

On 27 March 2019, the Annual General Meeting approved the proposal authorising the Board of Directors to increase share capital at any point in time until 22 March 2021 up to a maximum of CHF 4,000,000 fully paid-in registered shares with a nominal value of CHF 1.00 each, corresponding to around 21% of the share capital of Leonteq. Increases and partial increases by means of ﬁrm underwriting are permitted. The Board of Directors determines the issue price, the dividend entitlement and the form of contribution for the shares. The new registered shares are subject to transfer restrictions in accordance with the Articles of Association.

The shareholders' pre-emptive rights are granted in principle. To enable price stabilisation measures in the context of a capital increase, the Board of Directors may exclude the pre-emptive rights for the purpose of granting an overallotment option to the underwriting banks for up to 15% of the base size of the capital increase, provided the offer price of the shares is determined by way of a book-building procedure at market conditions. Shares for which the subscription right has not been exercised shall be used in the interests of the Company.

Conditional capital

The Company's share capital may be increased by a maximum aggregate amount of CHF 1,000,000, cor-responding to around 5% of the share capital of Leonteq. The share capital may be increased through the issuance of a maximum of 1,000,000 registered shares, fully paid-in with a nominal value of CHF 1.00 per share, upon the exercising of option rights or in connection with similar rights relating to shares (includ-ing existing or future Restricted Stock Units, RSU) granted to employees, directors and other ofﬁcers of the Company or its subsidiaries, according to the regulations prescribed by the Board of Directors. The pre-emptive rights and advance subscription rights of shareholders are excluded. The acquisition of registered shares and every subsequent transfer of those registered shares will be subject to transfer restrictions in accordance with the Articles of Association.

Conditions for the allocation and exercising of option rights and similar rights are determined by the Board of Directors. The shares may be issued at a price below the market price. Further information about the RSU programme is provided in the Compensation Report on page 117.

Shareholder structure

Leonteq's shareholder structure comprises a total of 4,137 shareholders, who are entered in Leonteq's share register, representing 80% of voting rights. As of 31 December 2020, 3,910 retail shareholders hold 25% of total outstanding shares while 227 legal entities account for 55% of share capital. 20% of voting rights are held by shareholders who are not entered in the share register.

The distribution of Leonteq shareholdings by investor type, nationality and size of holding are shown in the following charts:

Shareholders structure by type of investorRegistered shares by Nationality3

(Total; 15,052,449 shares)Registered shareholders by size of holding (Total; 15,052,449 shares)

2.6%12%

Retail investorsBanks

Switzerland

Germany

Holdings of 1-100

101-1,000

Funds

Other legal entities

Great Britain

Luxembourg

1,001-10,000

10.001-100,000

Not registered

United States

Other

more than 100,000

3 For legal entities nationality is based on the location of the entities' headquarters

Signiﬁcant shareholders

Under the Swiss Federal Act on Financial Market Infrastructure and Market Conduct in Securities and Derivative Trading ('FMIA'), anyone holding shares in a company listed on SIX Swiss Exchange is required to notify the company and SIX Exchange Regulation if their shareholding reaches, falls below or exceeds the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 331⁄3%, 50% or 662⁄3% of the voting rights entered in the commercial register, whether or not the voting rights can be exercised (i.e. notiﬁcations must also include certain derivative holdings such as options or similar instruments). Following receipt of such noti-ﬁcation, Leonteq publishes each individual report through the Disclosure Ofﬁce publication platform of SIX Exchange Regulation. In addition, Leonteq has an obligation to inform the public, should such notiﬁca-tion contain price-sensitive information. For notiﬁcations of signiﬁcant shareholders received and individual reports of signiﬁcant shareholders published during 2020, reference is made to the Disclosure Ofﬁce pub-lication platform of SIX Exchange Regulation:https://www.ser-ag.com/en/resources/notiﬁcations-market-participants/signiﬁcant-shareholders.html

The following provides an overview of the holdings of our signiﬁcant shareholders based on the most recent disclosure notiﬁcations. In line with the FMIA requirements, the percentages indicated below were calculated in relation to the share capital reﬂected in the commercial register at the time of the disclosure notiﬁcation. As shareholders are only required to notify the company and SIX Exchange Regulation if their holding reaches, falls below or exceeds the thresholds listed above, the percentage holdings of our signiﬁcant shareholders may vary at any given time compared to the date of submission of the most recent notiﬁcation for these respective shareholders. Whenever available, Leonteq publishes the shareholdings of its signiﬁcant share-holders according to the information entered in its share register at the end of each reporting period or conﬁrmations received from shareholders.

Signiﬁcant shareholders

31.12.2020	31.12.2019
Number of shares heldVoting rights in %	Number of shares heldVoting rights in %

Subtotal shareholders' agreement

7,569,697

39.98%

7,502,230

39.62%

Raiffeisen Switzerland Cooperative	5,494,996	29.02%	5,495,157	29.02%
Lukas T. Ruﬂin4,5	1,546,168	8.17%	1,543,756	8.15%
Sandro Dorigo	528,533	2.79%	463,317	2.45%
Rainer-Marc Frey6	1,920,929	10.15%	2,784,000	14.70%
Credit Suisse Funds AG7	936,167	4.94%	N/A	N/A
Swisscanto Fondsleitung AG8	573,783	3.03%	N/A	N/A
Directors and executives9	164,355	0.87%	178,322	0.94%

Total signiﬁcant shareholders

11,164,931

58.97%

10,464,552

55.26%

4 31.12.2020: Lukas T. Ruﬂin is the direct shareholder; 31.12.2019: Includes all the holdings of Lukas Ruﬂin (founding partner), Clairmont Trust Company Limited and Thabatseka LP; Clairmont Trust Company Limited acts as trustee of a trust that holds shares in Leonteq AG through Thabatseka LP (which, in turn, is indirectly wholly owned by Clairmont Trust Company Limited); the trust was settled by Lukas Ruﬂin.
5 In addition, Lukas T. Ruﬂin holds 462,325 call options issued by Raiffeisen subject to the following conditions: Strike price CHF 210 (adjusted by cumulative dividends per share and effects of corporate actions from 2015 to 2025); subscription ratio 1:1; maturity 19 October 2025; European style.
6 H21 Macro Limited, Cayman Islands, is the direct shareholder.
7 Creation of obligation to notify: 19 August 2020.
8 Creation of obligation to notify: 3 June 2020.
9 Excluding shareholdings of Lukas T. Ruﬂin.

The trust settled by Lukas Ruﬂin that held shares in Leonteq through Thabatseka LP, transferred all shares to Lukas Ruﬂin (acting in his own capacity) in the ﬁrst half of 2020. As of 31 December 2020, the share-holder group, consisting of the Raiffeisen Switzerland Cooperative, Lukas Ruﬂin and Sandro Dorigo, holds 7,569,697 shares or 39.98% voting rights in Leonteq. The representative of and main contact for this group of shareholders is Raiffeisen.

Cross-shareholdings

Leonteq has not entered into any cross-shareholdings with other joint stock companies that exceed 5% of the capital shareholdings or voting rights of either party.

Shareholder information

Shareholder engagement

The Group engages regularly with its shareholders and proxy advisors. The purpose of such engagements is to understand the perspectives of its shareholders, and to exchange views about the Group's strategy, ﬁnan-cial performance, corporate governance and compensation and other matters of importance to the Group or its shareholders. Shareholder engagement meetings may be attended by the Chairman of the Board, the Chairman of the Nomination and Remuneration Committee, the CEO, the CFO and senior management.

The Investor Relations department is responsible for Leonteq's engagement activities and aims to ensure that all shareholders receive the relevant information they need to make informed decisions.

Information policy

Leonteq is committed to an open and fair information policy with its shareholders and other stakeholders.

The Investor Relations department is responsible for handling all the inquiries it receives. It can be contacted via email atinvestorrelations@leonteq.com, via telephone at +41 58 800 18 55 or by post at Leonteq AG, Investor Relations, Europaallee 39, 8004 Zurich.

Leonteq provides information to its shareholders and other stakeholders each year by means of the annual and half-year reports, together with press releases, presentations and brochures, as required. Interested parties can subscribe to the e-mail distribution service to receive free and timely notiﬁcations of potentially price-sensitive information. The Company maintains a regular updated schedule of important publication and event dates, updated information on matters of corporate governance, such as the current composition of its Board of Directors and its Executive Committee, as well as the latest version of its Articles of Association.

All these reports and information are accessible to the public on the Investor Relations section of the Company's website at:www.leonteq.com/investors. The annual report is also available in printed form.

Notices required under Swiss law

Notices to shareholders required under Swiss law are published in the Swiss Ofﬁcial Gazette of Commerce. The Board may designate further means of communication for publishing notices to shareholders. Ad hoc notices required under the listing rules of SIX Exchange Regulation are published on the Company's website and simultaneously distributed via press releases to all interested parties, to at least two Swiss newspapers of national importance, to at least two electronic information systems, and to SIX Exchange Regulation.

Shareholder rights

Voting rights

Any person entered in the share register is deemed to be a shareholder. No statutory voting right restric-tions apply regarding registered shareholders, statutory group clauses or rules on granting exceptions. Each share carries an entitlement to one vote.

In line with the legal provisions, any shareholder with a voting right may have their share represented at any General Meeting by another person authorised in writing or by corporate bodies, independent proxies or proxies for deposed shares. Such representatives are not required to be shareholders. The statutory rules on participation in General Meetings do not differ from applicable legal provisions.

Each shareholder may be represented by a representative, who shall identify him- or herself by means of a written power of attorney, or by the independent proxy at the General Meeting. The Annual General Meeting elects the independent proxy. Those eligible to act as independent proxy are individuals, legal enti-ties or partnerships. The term of ofﬁce of the independent proxy is one year. It ends with the completion of the Annual General Meeting following their election. Re-election is possible. In the event that the Company has no independent proxy, the Board of Directors shall appoint one for the next Annual General Meeting.

The Board of Directors ensures that shareholders may tender their proxies and instructions to the inde-pendent proxy electronically. The independent proxy is obliged to vote according to the voting instructions received from shareholders. In the absence of instructions, the independent proxy shall abstain from voting.

Transfer of shares

Persons who have acquired registered shares of Leonteq AG will, upon request, be entered in the share register without limitation as shareholders with voting power, provided they expressly declare themselves to have acquired the shares concerned in their own name and for their own account, and they comply with the disclosure requirement stipulated by the FMIA. Apart from shares subject to a shareholder agreement and/or a lock-up undertaking, Leonteq's shares are freely transferable.

NOMINEES ARE ENTERED IN THE SHARE REGISTER WITH VOTING RIGHTS WITHOUT FURTHER

Acquirers of shares who do not expressly declare themselves to be holding those shares for their own account in their request for entry in the share register (referred to hereinafter as 'nominees') will be entered in the share register with voting rights without further inquiry up to a maximum of 2% of outstanding share capital available at the time. Above this limit, registered shares held by nominees will be entered in the share register with voting rights only if the nominee in question discloses the names, addresses and shareholdings of the persons or entities for whose account they are holding 0.5% or more of the outstand-ing share capital available at the time, and provided this is in compliance with the disclosure requirements stipulated by the FMIA. The Board of Directors has the right to conclude agreements with nominees con-cerning their disclosure requirements (to the extent permitted by law).

INQUIRY UP TO A MAXIMUM OF 2% OF OUTSTANDING

Legal entities, partnerships or other associations or joint ownership arrangements linked through capital ownership or voting rights, through common management or in a similar manner, and individuals, legal entities or partnerships (particularly syndicates) that act in concert with the intention of evading the entry restriction are considered as one nominee.

SHARE CAPITAL

Leonteq has issued its registered shares as uncertiﬁed securities (Wertrechte) and registered them as book-entry securities as deﬁned in the Swiss Act on Book-Entry Securities (Bundesgesetz über Bucheffekten). Shareholders have no right to request conversion of shares from the form in which they are issued into another form. Shareholders may at any time request an attestation from the Company that certiﬁes their current shareholding. Uncertiﬁed securities may only be transferred by means of assignment provided they are not issued as book-entry securities. To be valid, the assignment must be reported to the Company, which may refuse to enter the assignee in the share register in accordance with the provisions of the Articles of Association. The transfer of book-entry securities or the granting of security rights on book-entry securities must comply with the Swiss Act on Book-Entry Securities. The transfer of book-entry securities or the granting of security rights on book-entry securities by means of assignment is excluded. The transfer restrictions pursuant to the provisions of the Articles of Association are not affected by this regulation.

General Meetings

Leonteq's Annual General Meeting is held every year within four months of the end of the ﬁnancial year. In compliance with Swiss law and the provisions of the Articles of Association, General Meetings are con-vened at least 20 days before the date of the meeting by means of a notice published in the Swiss Ofﬁcial Gazette of Commerce, and by letter sent to the addresses of the shareholders entered in the share regis-ter. The notice of the meeting shall include information on the items of business to be discussed and the motions proposed by the Board of Directors and any shareholders who have requested that such a General Meeting be held or that an item of business be placed on the agenda.

In 2020, Leonteq held its Annual General Meeting in accordance with the requirements as deﬁned in the Ordinance of the Swiss Federal Council dated 16 March 2020 regarding measures to combat the spread of the coronavirus. According to these requirements, shareholders were not permitted to be physically pres-ent at the Annual General Meeting. Shareholders were only able to vote by granting a power of attorney to the independent proxy. The General Meeting of Leonteq on 31 March 2020 took place at the Leonteq headquarters in Zurich, with attendance being restricted to a member of the Board of Directors of Leonteq, employees of the Leonteq Group designated by the Board of Directors, the independent proxy and a repre-sentative of Leonteq's external auditor.

Extraordinary General Meetings are convened whenever necessary. One or more shareholders who collec-tively represent at least 10% of share capital may request in writing that a General Meeting be held, stating the item of business for discussion and the motions. The request shall be addressed to the Board of Directors.

Inclusion of an item on the agenda

Shareholders representing at least 3% of share capital may request in writing that an item of business to be placed on the agenda and voted on at the next General Meeting. The request to include a particular item on the agenda, together with the matters to be discussed and the motion, must be submitted in writing to the Board of Directors no later than 40 days prior to the General Meeting.

Entry in the share register

No statutory rule applies to the deadline for the registration of shareholders in connection with atten-dance at the General Meeting. However, for organisational reasons, no shareholders will be entered into the share register for a period of up to ten business days before a General Meeting, ending immediately after the close of the General Meeting. The Board of Directors announces the effective date set prior to a General Meeting in the Organisational Notes section of the respective invitation, which can be found on the company's website at:www.leonteq.com/generalmeetings.

THE AGM 2020 WAS HELD WITHOUT SHAREHOLDERS BEING PHYSICALLY PRESENT. INSTEAD, THEY EXERCISED THEIR VOTING RIGHTS VIA THE INDEPENDENT PROXY

Statutory quora

Resolutions and elections generally require the approval of a majority of the votes represented at the meeting, unless stipulated otherwise by Swiss law.

Say on pay

In accordance with the Swiss Code of Best Practice for Corporate Governance, the Group submitted the Compensation Report for a consultative vote by shareholders at the Annual General Meeting 2020. In accordance with the Ordinance against Excessive Compensation pertaining to Listed Stock Corporations ('Compensation Ordinance'), the Group will submit the following recommendations for compensation for the Board of Directors and the Executive Committee for binding votes by shareholders to the Annual General Meeting 2021:

• Total compensation of members of the Board of Directors for the period from the Annual General Meeting 2021 to the Annual General Meeting 2022;
• Fixed compensation for members of the Executive Committee for the ﬁnancial year 2022;
• Short-term incentive plan amount for members of the Executive Committee for the ﬁnancial year 2020 (retrospective vote);
• Long-term incentive plan grant amount of members of the Executive Committee for the ﬁnancial year 2021.

Granting of discharge to the Board of Directors and the Executive Committee

In accordance with Swiss law, the General Meeting has the power to grant discharge to the members of the Board of Directors and the Executive Committee. At the Annual General Meeting 2020, shareholders granted discharge to all members of the Board of Directors and the Executive Committee for the ﬁnancial year 2019.

Duty to make an offer

The Company's Articles of Association include an "opting out" clause with regard to mandatory public take-over offers, as deﬁned in the FMIA. Hence, the obligation that anyone who, directly or indirectly or acting in concert with third parties, acquires 331⁄3% or more of the voting rights of Leonteq - whether or not such rights are exercisable - must submit a public takeover offer, is set aside.

Clauses on change of control

No clauses on a change of control exist at Leonteq for members of the Board of Directors or members of the Executive Committee. In particular, there are no protective measures such as:

• Special provisions on the cancellation of contractual arrangements;
• Agreements concerning special notice periods or longer-term contracts exceeding 12 months;
• Waivers of lock-up periods;
• Shorter vesting periods;
• Additional contributions to pension funds that protect the above-mentioned persons based on certain contractual conditions against the consequences of takeovers.

In accordance with the Compensation Ordinance, which became effective on 1 January 2014, severance payments such as golden parachutes are prohibited.

BOARD OF DIRECTORS

General information

Board memberships and elections

According to Leonteq's Articles of Association, the Board of Directors consists of ﬁve or more members. Each member of the Board is individually elected by the Annual General Meeting for a term of one year. Members of the Board may be re-elected with no limitation on the number of terms served. The term of ofﬁce ends upon the completion of the Annual General Meeting following their election.

The Annual General Meeting shall elect a member of the Board of Directors to be the Chairman of the Board for a one-year term. In the event of the post of Chairman being vacant, the Board of Directors shall appoint a new Chairman for the remaining term until the next Annual General Meeting. The Board shall elect a Vice-Chairman from among its members. The Chairman or the Vice-Chairman must be domiciled in Switzerland. Furthermore, the Board shall appoint a Secretary who does not need to be a member of the Board.

Currently, the Board of Directors consists of eight non-executive members. No member of the Board of Directors of Leonteq exercised any operational management functions for the Company or any of its sub-sidiaries in the year under review. No member of the Board of Directors has held a management position in Leonteq or any of its Group companies in the last three years.

With a view to streamline its workﬂows, the Board adapted the structure of its committees and created a combined Audit and Risk Committee, alongside the Nomination and Remuneration Committee. The com-position of the Board and its committees following the Annual General Meeting 2020 is shown in the following table.

Members of the Board of DirectorsMember sinceIndependence

Audit & Risk CommitteeNomination and Remuneration Committee

Christopher M. Chambers (Chairman)

2017

Independent

Philippe Weber (Vice-Chairman)

Jörg Behrens

2020 2012

Independent



Independent

Patrick de Figueiredo

2010

Representative of founding partners



Susana Gomez Smith

Richard A. Laxer

2019 2018

Independent



Independent

Thomas R. Meier

Dominik Schärer

2017 2019

Independent



Representative of Raiffeisen Switzerland

MemberChair

Independence

The Board has applied the independence criteria in excess of the SIX Swiss Exchange Directive on Information relating to Corporate Governance, the FINMA Circular on Corporate Governance and the Swiss Code of Best Practice for Corporate Governance.

Leonteq's non-executive members of the Board of Directors are deemed independent if they:

• Are not currently, and have not in the previous three years, been employed in some other function within the Company;
• Have not been employed in the previous two years by Leonteq's audit ﬁrm as a lead auditor (of the regulatory audit);
• Have no commercial links with the Company which, in view of their nature and scope, would lead to a conﬂict of interests (including directorships on the Boards of commercial partners);
SIX OUT OF EIGHT MEMBERS OF THE BOARD OF DIRECTORS OF LEONTEQ MET THE INDEPENDENCE CRITERIA
• Are not signiﬁcant shareholders of Leonteq (shareholding of 10% or more) and are not representatives of individual shareholders (private or institutional) or a speciﬁc group of shareholders.

As of 31 December 2020, six out of eight members of the Board of Directors of Leonteq met the indepen-dence criteria. The independent members of the Board of Directors are: Jörg Behrens, Christopher Chambers, Susana Gomez Smith, Richard Laxer, Thomas Meier and Philippe Weber. Dominik Schärer acts as the repre-sentative of Raiffeisen and Patrick de Figueiredo acts as the representative of the founding partners.

Composition of the Board of Directors and succession planning

Over the past four years, Leonteq has signiﬁcantly improved and strengthened the independence, skills and diversity of the Board and its committees. Since the Annual General Meeting 2017, the composition of the Board has been refreshed with a total of six new members (including the Chairman) elected by Leonteq's shareholders.

Today, the background, skills and experience of Leonteq's Board members are diverse and include prior experience in senior executive positions at ﬁnancial services companies in Switzerland and abroad. The Board is composed of individuals with wide-ranging professional expertise in investment banking, wealth management, specialty ﬁnance, and audit and advisory services. Diversity of culture, experience and opinion, as well as gender diversity, are important criteria that are considered in the composition of Leonteq's Board. While the ratio of female-to-male Board members is currently below 20%, the Board is committed to increasing its gender balance over the long term.

Length of tenure

Age

(2020 vs 2017)

2020

3 1 1

4 3

2020

≤ 2 years

3-5 years

6-10 years

> 10 years

< 50 years> 65 years

51-55 years61-65 years

56-60 years

Industry Experience

Independence of the Board

(2020 vs 2017)

2020

1 2

5 1 6

2020

Investment bankingWealth management

IndependentNon-independentAudit & advisory servicesSpeciality ﬁnanceLaw

Gender

Nationality

(2020 vs 2017)

(202010 vs 2017)

2020

2017

10 Dual citizenships are counted twice

The Board of Directors manages its composition through a formal rotation of its members as well as back-ground and skill mapping to achieve an optimal structure over time. The Nomination and Remuneration Committee regularly considers the composition of the Board as a whole and the composition of its Committees. The Nomination and Remuneration Committee takes into account skills, management experi-ence, independence and diversity when recruiting and evaluating candidates for Board membership. It also considers the other activities and commitments of potential candidates to ensure that they can devote sufﬁcient time to a Board position at Leonteq. The Nomination and Remuneration Committee aims to main-tain a high level of talent and experience and continues to strive for greater diversity in terms of the skills and background of its members through new nominations.

Board skill

1 Financial/regulated industry experience

100%

2 International business experience
100%
3 Listed company experience
75%
4 Structured products and derivatives experience
75%
5 Risk management and control experience
50%
6 Finance & audit experience
50%
7 Legal experience
13%
8 HR and compensation experience
13%
9 Technology, digitisation, innovation experience
0%
10 Insurance experience
0%
1 ~10 years in executive role in ﬁnancial industry
2 ~10 years of international business experience
3 ~5 years of experience as non-executive director of listed company
4 ~5 years of professional experience in structuring and sales of structured products and derivatives
5 ~5 years of professional experience in risk management and control activities (or at least 5 years of board risk committee experience)
6 ~5 years of professional experience in corporate law activities
7 ~5 years of professional experience in ﬁnance, audit and ﬁnancial management activities (or ~5 years of board audit committee experience)
8 ~5 years of professional experience in Human Resources management (or at least 5 years of board compensation committee experience)
9 ~5 years of professional experience in technology sector
10 ~5 years of professional experience in insurance sector

Board meetings

The Board of Directors meets as often as required to fulﬁl its duties and responsibilities but at least once per quarter. The Chairman convenes meetings of the Board of Directors. However, each Board member is entitled to request at any time that the Chairman convene a meeting. In cases where no meeting is con-vened by the Chairman within a reasonable period of time after such a request is made, the Board member who submitted the request is entitled to convene the meeting him- or herself. Each Board member is entitled to request that items be placed on the agenda of the next Board meeting.

Notice of meetings of the Board of Directors is given at least ﬁve days in advance, together with the agenda and the necessary documentation, to enable members to prepare for the meeting. If all Board members are present and agree, deviations from these formal requirements are permitted; in particular, decisions can be taken on items that are not listed on the agenda. In urgent cases, the Chairman may convene a meeting without observing the ﬁve-day notice period, and without the need to distribute the agenda or the necessary documentation to prepare for the meeting in advance.

Meetings of the Board of Directors are chaired by the Chairman or, if he is unable to attend, by the Vice-Chairman or another member of the Board of Directors. In exceptional cases, meetings may also be conducted by telephone or video conference or an equivalent means of instant communication. In such cases, the participating members shall be deemed to be present. In general, meetings shall be held in person. The General Counsel serves as Secretary to the Board of Directors. Unless the Chairman decides otherwise, the CEO and the Chief Financial Ofﬁcer ('CFO') may attend each Board meeting as guests in an advisory capacity. The Chairman determines which other individuals may attend Board meetings as guests. Such individuals do not have any voting rights.

THE BOARD OF DIRECTORS HELD

A quorum is constituted when at least two-thirds of the members of the Board of Directors are present. No quorum is required if the sole purpose of the meeting is to record the implementation of a capital increase and the approval of the corresponding amendments of the Articles of Association. A Board mem-ber who abstains from voting shall be deemed to be present. The Board of Directors passes its resolutions with the majority of votes cast. In the event of a tied vote, the Chairman of the meeting has the casting vote. All resolutions are recorded in writing. The Secretary is responsible for writing the minutes, which are signed by the member who chaired the meeting and the Secretary and must be approved by the Board of Directors. No member of the Board of Directors shall participate in or vote on any matter that gives rise to a personal conﬂict of interests.

20 MEETINGS,

INCLUDING A

Resolutions of the Board of Directors may also be taken by means of circular resolutions, provided that no Board member requests oral deliberation within the decision period and at least two-thirds of the Board members vote by means of such circular resolution. The circular resolution, signed by the Board members and the Secretary, serves as the minutes. The Board of Directors passes circular resolutions unanimously.

TWO-DAY

STRATEGY OFFSITE MEETING

In 2020, the Board of Directors held 20 meetings, including a two-day strategy offsite meeting. The total attendance rate for all members of the Board of Directors was an average of 98% in 2020. The Board Com-mittees held a total of 17 meetings and the attendance rate for committee members was 100%. The total duration of Board and committee meetings was 105 hours, or 13 meeting days.

Attendance of Board and Board Committee meetings in 2020

TOTAL NUMBER OF MEETINGS HELDMEETINGS ATTENDANCE IN %TOTAL LENGTH OF MEETINGS IN HOURS

Board meetings

98%

Nominationand Remuneration Committee

100%

AuditandRisk Committee 11

100%

Audit

Risk

Committee 11 Committee 11

100%

11 The Audit Committee and the Risk Committee have been merged to the Audit and Risk Committee following the Annual General Meeting 2020

Attendance of Board and Board Committee meetings in 2020

Individual Board members12	95%-99%	100%
Christopher M. Chambers	
Philippe Weber	
Hans Isler12	
Jörg Behrens	
Patrick de Figueiredo	
Susana Gomez Smith	
Richard A. Laxer	
Thomas R. Meier	
Dominik Schärer	

12 Hans Isler did not stand for re-election at the Annual General Meeting on 31 March 2020

At times in 2020, Board meetings were called by the Chairman without the usual ﬁve-day notice period in order to discuss and decide on urgent matters. A total of 10 such meetings were called in 2020, usually lasting between 30 minutes and one hour. Four members of the Board of Directors missed one of these meetings that were convened at short notice in 2020.

Mandates

According to the Articles of Association, members of the Board of Directors are not permitted to hold or exercise more than the following number of additional activities in the executive or administrative bodies of other legal entities that are required to be entered in the commercial register or a comparable foreign registry, and that are not controlled or held directly or indirectly by the Company:

Type of mandate	Limit
Legal entities13	No more than 10 mandates
of which listed companies13	No more than 4 mandates
Charitable legal entities14	No more than 10 mandates

13 Mandates for which remuneration is received, whereby multiple mandates in various companies that belong to the same group of companies count as one.

Mandates for which no remuneration is received.

No Board member holds mandates in excess of these restrictions. Mandates exercised by a member of the Board of Directors at the request of the Company are exempt from these restrictions.

Members of the Board shall inform the Chairman of the Board of all external business activities, irrespective of whether or not they are remunerated. Before accepting or committing to new external business activi-ties, approval must be sought by the Chairman of the Board who considers a number of additional factors in excess of the restrictions listed above. Generally, external business activities are prohibited if they create any potential conﬂicts of interests or adversely impact the Board member's performance or his/her regular work.

Board leadership

Leonteq operates under a strict dual Board structure, as prescribed by Swiss banking law. The functions of the Chairman of the Board of Directors and of the CEO are assigned to different people, thus ensuring the separation of powers. This structure establishes checks and balances and it ensures the institutional inde-pendence of the Board of Directors from the daily running of the Company. Operational responsibility for the business is delegated to the Executive Committee, led by the CEO.

THE FUNCTIONS OF THE CHAIRMAN

OF THE BOARD

OF DIRECTORS AND OF THE CEO ARE ASSIGNED TO DIFFERENT PEOPLE,

The responsibilities and powers of the Board of Directors are derived from applicable legal and supervi-sory regulations and the Company's Organisational and Management Regulations. The Board of Directors is responsible for the strategic direction of the Group and for determining and implementing the principles of organisation, management and monitoring. The Board is also responsible for providing the resources required to achieve the deﬁned objectives, and it bears ultimate responsibility for the overall achievement of results. The Board supervises the running of the Group as a whole, and it coordinates and oversees all activities carried out by and in the name of the Group.

Responsibilities of the Board of Directors

ENSURING THE SEPARATION OF

POWERS

The Board of Directors has ultimate oversight of the Company and its subsidiaries, and it is responsible for the overall direction, supervision and monitoring of the business as well as its ﬁnancial reporting. The Board of Directors generally takes account of the proposals of the Executive Committee when dis-charging its duties. In particular, the Board of Directors deﬁnes the overall direction and strategy of the Company. It determines the organisation of the Company and it issues and amends the Organisational and Management Regulations. It deﬁnes the business policies and strategies, issues and annually reviews the necessary directives and regulations, and determines the corporate governance principles.

The Board of Directors approves the organisation and design of accounting, ﬁnancial controls and ﬁnancial planning and it issues guidelines for ﬁnancial reporting, following decisions by the Audit and Risk Committee. It also decides on strategic ﬁnancial and capital planning and is further responsible for the annual busi-ness plan and budget. It approves the overall risk policies and global risk limits, following decisions by the Risk Committee. It further issues remuneration guidelines and compensation models for the Group at the request of the CEO; the Board of Directors takes account of the recommendations of the Nomination and Remuneration Committee when discharging this duty.

In addition, the Board of Directors determines the composition of the Executive Committee, appoints and dismisses members of the Executive Committee and is responsible for succession planning for the members of the Board of Directors and the Executive Committee, in accordance with the proposals of the Nomination and Remuneration Committee. It supervises the Executive Committee in respect of its compliance with laws and regulations, and the implementation of the Group's corporate governance principles, Articles of Association, directives and resolutions. It also determines and grants signatory powers; the Board further appoints and dismisses members of internal audit and determines the organisation and scope of internal audit activities; the Board of Directors takes account of the recommendations of the Audit and Risk Committee when discharging these duties.

The Board of Directors, with support and advice from the Board Committees, is responsible for preparing all topics that fall within the competence of the Annual General Meeting, in particular the preparation, conven-ing and setting of the agenda for the Annual General Meeting, the preparation and submission of the annual ﬁnancial statements and the annual report, together with the appropriation of net proﬁts available for distri-bution, as well as proposals for the compensation of the Board of Directors and the Executive Committee. The Board of Directors further prepares and submits amendments to the Articles of Association and to the scope of business for the Annual General Meeting; it assesses, pre-selects and proposes appointments of potential new Board members (and the dismissal of existing members), proposes the appointment of the independent auditors, and is generally in charge of the implementation of resolutions approved by the Annual General Meeting.

The placement and acceptance of binding and non-binding merger and acquisition offers, the conclusion of ﬁnal contracts, the entry into, dissolution and modiﬁcation of joint ventures of strategic importance, and the issuance of unlimited guarantees, letters of comfort and similar matters, also fall within the remit of the Board of Directors. It approves capital market transactions involving Leonteq shares of more than 3% of the total share capital of the Company, approves ﬁnancial commitments in connection with investments and long-term contracts of over CHF 3 million, following decisions by the Executive Committee, and decides on ﬁnancial commitments in connection with investments and long-term contracts of over CHF 5 million or more if they are not already included in the budget. It also approves the acquisition and encumbrance of real estate. The Board of Directors further decides on the initiation and withdrawal of court proceedings or other legal pro-ceedings of a material nature and the conclusion of settlements if the amount owed exceeds CHF 1,000,000.

Finally, the Board is responsible for notiﬁcation of the judiciary if the Company were to become overindebted.

Board oversight

To control the business activities of the Group, the Board of Directors has formed the Audit and Risk Committee and the Nomination and Remuneration Committee. The Chairman of each Committee is in regular contact with the Executive Committee and senior management and provides the Board of Directors with regular updates on the current activities of the Committee and important Committee matters. Minutes of Committee meetings are made available to the entire Board of Directors. Regular communication is held in between Board and Committee meetings in order to allow Board members to provide updates on current topics and initiatives, to exchange views and opinions, and to decide upon more urgent matters.

The Board supervises the Executive Committee by conducting Board meetings at least four times a year. The CEO, CFO and General Counsel attend the Board meetings, update the Board on important issues and are available to answer questions. Other members of the Executive Committee are available on a case-by-case basis upon request. Between meetings, the Board of Directors is informed in writing about current business developments and the Company's ﬁnancial situation on a monthly basis. Additionally, the Chairman of the Board meets with the CEO on a regular basis to discuss business operations and issues of fundamental importance. The Chairman of the Audit and Risk Committee meets with the CFO and the Chief Risk Ofﬁcer (CRO) and the Chairman of the Nomination and Remuneration Committee meets with the Chief People Ofﬁcer (CPO) to hold similar discussions.

THE BOARD SUPERVISES THE EC BY CONDUCTING BOARD MEETINGS AT LEAST FOUR TIMES A YEAR

In general, each Board member is entitled to request information from the Executive Committee on all matters relating to the Company and to the Group as a whole. The Board is informed about extraordinary items as soon as reasonably practical by way of a circular letter or, if appropriate, by telephone or e-mail. Furthermore, the Board receives recurring business and governance-relevant information on a regular basis, as described below:

At least once a quarter, the Board receives:

• From the CFO: The quarterly ﬁnancial update with information concerning operating income and expenditure, income statements with budget vs. actual ﬁnancial information, periodic forecasts, key performance indicators and additional ﬁnancial information.
• From the CRO: The risk report, which provides in-depth information on risk exposures, proﬁt and loss, the investment portfolio, limit monitoring results, market risk (including sensitivities, and stress testing), counterparty risks with the highest exposures, operational risk, liquidity and risk proﬁles of business units.

On a regular basis, the Board receives:

• From the CEO: The monthly CEO update, which provides summary information on ﬁnancials, projects, people and other relevant business matters;
• From the CRO: The weekly risk dashboard, which provides high-level information on all risk dimensions, including capital and proﬁt and loss, liquidity, market risk, the investment portfolio, operational risk, counterparty credit risks and updates on Leonteq's SHIP.

At least once annually, the entire Board is provided with the compliance risk assessment and compli-ance activity reports by the General Counsel. It also receives documentation that serves as a basis when the Board reaches its decision about corporate strategy (prepared by the CEO), annual budgets and the three-year ﬁnancial plan (prepared by the CFO) and strategic capital planning as well as liquidity planning (prepared by the CRO). Finally, Board members receive ad hoc reports on new business proposals and other relevant business matters from the CEO, and regular reports on claims and litigation prepared by the General Counsel.

At least once a quarter, the Audit and Risk Committee receives:

• Reports on internal and external audit activities and updates on the status and resolution of audit items;
• Updates on legal, compliance and tax cases from the General Counsel;
• The risk report from the CRO;
• Details of the capital base, large exposure risk and the ten largest debtors from the CRO.

At least once annually, the Board Audit and Risk Committee is informed about the Group's internal control system and receives updates on new accounting standards from the CFO, receives reports on regulatory and compliance topics from the General Counsel, and is informed about the Group's risk status by the CRO.

Procedures in the event of conﬂicts of interests

Members of the Board of Directors and members of the Executive Committee shall endeavour to avoid any action, position or interest that conﬂicts with the interests of the Company, any of the subsidiaries or the Group as a whole, or that give the appearance of such a conﬂict of interests. If a conﬂict of interests is believed to exist, the relevant Board member or member of the Executive Committee is obliged to:

• Immediately inform the Chairman or, in the event of a conﬂict of interests concerning the Chairman, the Vice-Chairman;
• Refrain from all related discussions (other than issuing a personal statement on the matter and answer-ing questions regarding the matter) and abstain from voting upon all matters involving the interests concerned.

In case of doubt, the Chairman, or in case of a conﬂict of interests concerning the Chairman, the Vice-Chairman, needs to determine whether a conﬂict of interest actually exists. In addition to this general rule, the Board of Directors holds its meetings in accordance with the following principles:

• No members of the Executive Committee are present at Board meetings if discussions are held or decisions are made with respect to their performance, compensation, recruitment or any matter of a personal nature relating to the Executive Committee or individual members;
• From time to time, parts of Board meetings are held in private sessions without Executive Committee members being present if the Board discusses matters of a fundamental strategic nature for the Company.

Board evaluation

The Board of Directors performs a self-assessment once a year, when it reviews its own performance against the responsibilities listed in the Organisational Management Regulations, including the adequate execution of its monitoring and control function, and the further development of the Group's strategy. Furthermore, it assesses interaction with the Executive Committee as well as with the external auditors and internal Audit.

Board changes

THE BOARD OF DIRECTORS

PERFORMS A SELF-ASSESSMENT

Hans Isler did not stand for re-election at the Annual General Meeting on 31 March 2020. Hans Isler had served as a member of the Board of Directors, as Chairman of the Audit Committee and as a member of the Risk Committee since 2012, the year in which Leonteq went public. He had served as Vice-Chairman since 2018.

ONCE A YEAR

Philippe Weber was elected as new member of the Board of Directors at the Annual General Meeting on 31 March 2020.

Board Committees

The Board of Directors has delegated certain resolutions, their preparation and implementation, and the supervision of the business of the Company and the Group to the Board Committees. With a view to streamline workﬂows, the Board adapted the structure of its Committees and created a combined Audit and Risk Committee, alongside the Nomination and Remuneration Committee. Following the Annual General Meeting 2020, the Board has two standing committees: The Audit and Risk Committee and the Nomination and Remuneration Committee. The Board Committees inform the Board in a timely manner of their ﬁndings and actions. Each Board Committee has the power to retain independent legal, accounting, ﬁnancial and other advisors and consultants as it may deem necessary, at the expense of the Company and without the need to obtain prior approval of the entire Board of Directors.

The Board Committees meet as often as required to fulﬁl their duties and responsibilities, but at least once a quarter, usually before an ordinary meeting of the Board of Directors. The Chairman of the relevant Board Committee convenes the meetings. Notice of Board Committee meetings are given at least ﬁve days in advance. Each member of a Board Committee is entitled to request at any time that the Chairman of the relevant Board Committee convene a meeting. In cases where no meeting is convened by the Chairman of the Board Committee within a reasonable period of time after such a request is made, the Board Committee member who submitted the request is entitled to convene the meeting. Each Board Committee member is entitled to request that items be placed on the agenda for the next meeting.

Each Board member has the right to attend all Board Committee meetings as a guest without voting rights and to receive all information provided to members of the Board Committees. If Board Committee members conclude that their presence may have an inﬂuence on independent decision-making by the Committee, they may decide to deny this right of attendance and to call for the Committee to hold a private session. The Chairman of the Board is not permitted to attend Audit and Risk Committee meetings. The Chairman of each Board Committee shall determine which members of the Executive Committee or other individuals may attend the meetings as guests. Such guests do not have voting rights. The Board Committees may reach their decisions in private meetings. The Board Committees pass resolutions and adopt proposals with the majority of votes cast. In the event of a tied vote, the Chairman of the Board Committee has the casting vote. The Board Committees may take decisions in private meetings.

THE BOARD ADAPTED THE STRUCTURE OF ITS COMMITTEES AND CREATED A COMBINED AUDIT AND RISK COMMITTEE

The term of membership of a Board Committee is one year upon appointment. Re-election is possible. The constitution of the Audit and Risk Committee falls within the remit of the Board of Directors. Members of the Nomination and Remuneration Committee are elected individually by the Annual General Meeting, pursuant to provisions of the Compensation Ordinance.

Audit and Risk Committee

The Audit and Risk Committee consists of a Chairman and a minimum of one other member of the Board and shall comprise a majority of independent members. On 31 December 2020, the Audit and Risk Committee comprised four Board members: Jörg Behrens chaired the Committee, with Patrick de Figueiredo, Susana Gomez Smith and Thomas Meier as members. Three out of the four members are independent.

The Audit and Risk Committee meets at least four times per year. Meetings are usually attended by the CFO, the CRO and managers responsible for the areas supervised by the Audit and Risk Committee. In addition, the Audit and Risk Committee holds risk workshops, which last half a day and focus on topics such as liquidity frameworks, forthcoming regulatory developments and the impact of the market environment on the risk management of issued structured products.

The Audit and Risk Committee supports the Board of Directors in its Group-wide supervision of the following areas of audit:

• Financial and business reporting processes, including processes related to the preparation of ﬁnan-cial reports, ﬁnancial statements and business reports, together with the monitoring of tax matters;
• The review and evaluation of the efﬁciency and effectiveness of the risk control and internal control framework from an audit perspective;
• Internal and external audit processes, including a review of the activities, adequacy, effectiveness and organisational structure of the Internal Audit function, a review of Internal Audit's risk assess-ment, a discussion of the risk proﬁle and the related audit approach with the external auditor, the review and approval of the approach proposed by the external auditor, and a review of the perfor-mance of the external auditor;
• Compliance with laws, regulations, policies and best practices throughout the Group;
• The entire Board of Directors approves the organisation and design of accounting, ﬁnancial control and ﬁnancial planning, following a decision by the Audit and Risk Committee;
• The internal control system of the Group.

Furthermore, the Audit and Risk Committee supports the Board of Directors in its Group-wide supervision of the following areas:

• A wide variety of risks; in particular, credit (clients, counterparties, bond investment portfolios, coun-tries, large exposures), market, liquidity, correlation, reputational and operational risks;
• General risks within the policy, framework, rules and risk limits set by the Board or by the Committee itself;
• The risk management process throughout the Group.

The entire Board of Directors approves the overall risk policies and global risk limits, following a decision by the Audit and Risk Committee.

Activities of the Audit and Risk Committee in 2020

THE AUDIT AND RISK COMMITTEE

During 2020, the Audit and Risk Committee focused on several key areas of audit, including but not limited to:

FOCUSED ON

• The review of speciﬁc accounting and reporting matters, such as credit spread amendments and revenue recognition of fee income;
THE REVIEW AND ENDORSEMENT OF THE RISK APPETITE
• The regular review of audit activities;
• The review of the adequacy of the internal control framework;
• The regular review of legal, tax and compliance cases throughout the Group;
FRAMEWORK, AMONG OTHER
• The review and renewal process for directors' and ofﬁcers' liability and professional Indemnity insurances.

During 2020, the Audit and Risk Committee focused on several key areas of risk, including but not limited to:

ACTIVITIES

• The review and endorsement of the risk appetite framework for 2021, including the risk appetite statement for the Group, based on an integrated risk and ﬁnancial planning process;
• Monitoring of aspects of the Group's risk management framework, e.g. with respect to liquidity risk, stress testing and the control framework;
• The review of the limit framework in order to match business needs with the Board of Directors' risk appetite;
• The review, assessment and approval of strategic initiatives, e.g. with respect to changes to the investment portfolio.

Internal Audit

Independent audits are performed by Ernst & Young Ltd. (Internal Audit), which reports to Leonteq's Audit and Risk Committee. Since it operates independently of management from an organisational perspective, it provides Leonteq's Board of Directors and the Audit and Risk Committee with independent and objective assurance of the adequacy and effectiveness of the internal control system. It further establishes whether the activities of the Group comply with applicable policies, procedures and the rules and regulations that apply to Leonteq. Internal Audit maintains a regular dialogue with the external auditor to share information about risk issues arising from their respective audits and to coordinate their activities. The obligations and rights of Internal Audit are set out in the Organisational Management Regulations. In accordance with this charter, Internal Audit has unrestricted access at all times to accounts, systems, premises, people, informa-tion and documents regarding all aspects of Leonteq and its subsidiaries. The Audit and Risk Committee meets the lead partner of Internal Audit on a regular basis.

External Audit

The Audit and Risk Committee monitors the qualiﬁcation, independence and performance of the Group's auditors and the lead partner. The Audit and Risk Committee confers with Leonteq's auditors concerning the effectiveness of the internal control systems in view of Leonteq's risk proﬁle. The external auditor pro-vides timely reports to the Audit and Risk Committee on critical accounting policies and practices employed, alternative treatments of ﬁnancial information discussed with management, and other material written com-munication between the external auditor and management.

The Audit and Risk Committee meets the lead partner of the external auditor on a regular basis. At least once a year, the Chairman of the Audit and Risk Committee discusses the audit work performed with the lead partner of the external auditor, together with the main ﬁndings and any critical issues that may have arisen during the audit. The Chairman of the Audit and Risk Committee reports back to the Board of Directors on the contacts and discussions with the external auditor. The external auditor has direct access to the Audit and Risk Committee at all times.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of a Chairman and a minimum of one other member of the Board and shall comprise a majority of independent members. On 31 December 2020, the Nomination and Remuneration Committee comprised three members: Richard Laxer (Chairman), Susana Gomez Smith and Philippe Weber. In accordance with the provisions of the Compensation Ordinance, all members of the Nomination and Remuneration Committee were elected individually for a term of one year by the Annual General Meeting 2020. All three members are independent.

The Nomination and Remuneration Committee meets at least four times per year. Meetings are usually attended by the CEO, the CFO, the CPO and management responsible for compensation reporting and controlling. Any members of the Executive Committee who attend the meeting withdraw when their own compensation, performance or potential promotion are discussed.

The Nomination and Remuneration Committee regularly reviews and oversees the Company's compensation policies and models. It is responsible for conducting a formal evaluation process and prepares the basis for the decisions of the Board of Directors regarding the total compensation of the members of the Board of Directors and the Executive Committee, as well as the overall remuneration of all other Group employees. In particular, it submits to the Board of Directors proposals for:

• Compensation principles, especially in relation to performance-related compensation and the alloca-tion of equity securities or warrants of and the auditing and compliance with them;
• The individual compensation for the members of the Board of Directors and the Executive Committee and the structure of the corresponding agreements;
• The motion proposed to the Annual General Meeting for approval of the maximum total amounts of compensation of the Board of Directors and the Executive Committee;
• The Compensation Report for subsequent submission to the Annual General Meeting for a consulta-tive vote.

The Nomination and Remuneration Committee is additionally responsible for:

• Reviewing the structure, size and composition of the Board of Directors, appointing members of Board Committees, proposing appointments to the Executive Committee and making recommendations on these matters to the Board;
• Evaluating the experience, knowledge and skills of the Board before an appointment is made and preparing a description of the role and capabilities required for a particular appointment;
• Succession planning for all Board and Executive Committee members.

Activities of the Nomination and Remuneration Committee in 2020

During 2020, the Nomination and Remuneration Committee focused on several key areas, including but not limited to:

• Implementation of an enhanced objective framework that the deﬁnes overarching principles of the Committee;
• Review of the organisational structure, ensuring a proper succession planning for all Board and Executive Committee members and other key functions, and strengthening the organisation through replacements and /or the appointment of new deputies;
• Proposal to the Board of the appointment of new members of the Executive Committee, i.e. the appointment of a Chief People Ofﬁcer and of a new Head Investment Solutions, complementing and extending the existing skill sets;
• Preparing a skills matrix for the Board of Directors to identify potential new Board members who would complement, enhance or cover skill sets of the Board with regard to, among others, profes-sional expertise, experience and diversity.

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Leonteq AG published this content on 11 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 February 2021 10:16:04 UTC.

Market Closed - Swiss Exchange Other stock markets 11:30:38 2024-04-18 am EDT			5-day change	1st Jan Change
23.7 ^CHF	-5.77%		-8.14%	-31.00%

Apr. 18	Leonteq Appoints Successor to Outgoing CFO	MT
Apr. 12	Swiss Equities Close Lower Amid Uncertain Interest Rate Path	MT

Leonteq Appoints Successor to Outgoing CFO	Apr. 18	MT
Swiss Equities Close Lower Amid Uncertain Interest Rate Path	Apr. 12	MT
Leonteq, Raiffeisen Extend Structured Products Collaboration	Apr. 12	MT
Leonteq to Take Over as Market Maker on BX Swiss Exchange	Apr. 05	MT
French banking watchdog flags possible fraud at Leonteq to prosecutors, report says	Mar. 06	RE
Leonteq AG Reports Earnings Results for the Full Year Ended December 31, 2023	Feb. 08	CI
Transcript : Leonteq AG, 2023 Earnings Call, Feb 08, 2024	Feb. 08
Leonteq Posts Fall in FY23 Allocated Profit, Operating Income	Feb. 08	MT
Leonteq Adds Insurance Companies to Target List for Digital Offering	Jan. 30	MT
Tranche Update on Leonteq AG's Equity Buyback Plan announced on February 9, 2023.	Dec. 22	CI
Leonteq AG's Equity Buyback announced on February 9, 2023, has closed with 439,855 shares, representing 2.44% for CHF 18 million.	Dec. 21	CI
Global markets live: Apple, AbbVie, Comcast, FMC Accenture...	Dec. 19
Leonteq Buys Minority Stake in BX Swiss Stock Exchange	Dec. 19	MT
Leonteq AG acquired 10% stake in BX Swiss AG from Boerse Stuttgart GmbH.	Dec. 18	CI
Switzerland's Leonteq Updates FY23 Guidance	Dec. 01	MT
Fitch Lifts Leonteq's Ratings on Strong Franchise, Sufficient Capitalization	23-10-24	MT
Hywin Holdings, Leonteq AG, and Arta TechFin Jointly Launch ?Global Mega-Trends Series? Principal-Protected Notes	23-08-03	CI
Markets dream of a blue sky scenario	23-07-25
Transcript : Leonteq AG, H1 2023 Earnings Call, Jul 20, 2023	23-07-20
Leonteq Posts Lower H1 Net Profit; Operating Income Falls	23-07-20	MT
Tranche Update on Leonteq AG's Equity Buyback Plan announced on February 9, 2023.	23-07-19	CI
Leonteq AG Reports Earnings Results for the Half Year Ended June 30, 2023	23-07-19	CI
Global markets live: Nvidia, IBM, Ford, Pfizer, Lucid Group...	23-06-26
Leonteq Lowers FY23 Profit Outlook	23-06-26	MT
Leonteq Appoints Successor to Outgoing CFO	23-06-14	MT

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LEONTEQ AG	-31.00%	457M
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STONECO LTD.	-15.36%	4.72B

Leonteq AG

Equities

LEON

CH0190891181

Financial Technology (Fintech)

Leonteq : Annual Report 2020 (Leonteq Group)

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