Navigating the Swiss regulatory landscape for effective distribution
Switzerland’s wealth managers have often sought to domicile funds in Luxembourg for distribution back to Switzerland and further afield. Meanwhile, Luxembourg funds have successfully sought access to the many wealth managers in Switzerland over the years.
According to FINMA statistics as at 30 June 2013, out of a total of 6,106 foreign funds registered with FINMA for distribution, 4,117 are Luxembourg domiciled. Luxembourg funds benefit most from Switzerland’s acceptance of foreign funds.
With the revised Collective Investment Schemes Act (CISA) and the revised Collective Investment Schemes Ordinance (CISO), which both entered into force on 1 March 2013, some new rules applicable to the marketing of foreign collective investment schemes have been implemented and the private placement regime has been restricted.
Any form of advertising or offering of collective investment schemes to non-qualified investors or 'retail investors' is considered as distribution. The definition of distribution extends to public entities, pension schemes with professional treasury operations, companies with professional treasury operations and high net worth individuals (if they opted in to be considered as qualified investors).
Any type of 'distribution' will now require the appointment of a Swiss representative and paying agent. However, if distribution is limited to qualified investors only, authorisation of fund documents prior to their distribution in Switzerland is not required.