Information on the FinIA

A portfolio manager is a person mandated to manage assets on a commercial basis in the name of and on behalf of clients or who may dispose of clients' assets in any other manner (Art. 17 FinIA). Portfolio managers manage individual portfolios.

Managers of collective assets who manage the assets of collective investment schemes or occupational pension schemes below the defined thresholds (see Art. 24 para. 2 FinIA) are deemed to be portfolio managers.

A trustee is a person who on a commercial basis manages or disposes of a separate fund for the benefit of a beneficiary or for a specified purpose based on a restricted grant given namely in the instrument creating a trust within the meaning of the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on Their Recognition. The trustee manages the separate fund, ensures its value is maintained and employs it in a restricted manner.

Portfolio managers and trustees must be authorised by FINMA.

PMs and trustees who will now be subject to the requirement for authorisation must report to FINMA within six months of the FinIA's entry into force. They must then meet the statutory requirements within three years of the legislation's entry into force and submit a request for authorisation. They can continue to operate until a decision is reached regarding their authorisation, provided that they are affiliated to an SRO, as defined in Article 24 of the Federal Act on Combating Money Laundering and Terrorist Financing (AMLA), and are supervised by this SRO in relation to compliance with the relevant requirements.

PMs and trustees commencing operations within one year of the FinIA's entry into force must report to FINMA without delay and must meet the conditions for authorisation from the date on which they commence operations, irrespective of the requirement to affiliate to an SO. No later than one year after FINMA has approved an SO, they must affiliate to such an SO and submit a request for authorisation. They can continue to operate until a decision is reached regarding their authorisation, provided that they are affiliated to an SRO, as defined in Article 24 AMLA, and are supervised by this SRO in relation to compliance with the relevant requirements.

No. In the course of its discussions, Parliament rejected the "grandfathering” provision (i.e. the possibility of making exceptions to the authorisation requirement for portfolio managers who have already been established for many years).

Portfolio managers and trustees require FINMA authorisation. When applying for authorisation, portfolio managers and trustees must provide evidence that they are supervised by an SO.

From January 2020, the authorisation process will be handled electronically via the EHP survey and application platform and will basically consist of five steps:

1. Self-registration

Portfolio managers and trustees must self-register to gain access to the EHP. They can do this from January 2020 via the FINMA homepage. Following self-registration, they will be able to access the EHP through the FINMA portal via two-factor identification.

2. Notifying FINMA

Portfolio managers and trustees who have become subject to an authorisation requirement must notify FINMA within six months of the FinIA coming into force. This notification takes place exclusively via the EHP survey and application platform. After notification has been made, an institution must submit an authorisation application to FINMA no more than three years after the FinIA comes into force. An application template which can be completed directly on the EHP is used to apply for authorisation.

3. Confirmation of affiliation by an SO

Before the authorisation application can be submitted to FINMA, the portfolio manager or trustee must be affiliated with an SO. This requires them to submit an application to an SO. After the authorisation application and the required documents have been fully recorded in the EHP, the information recorded there for the FINMA authorisation application can be used for the selected SO. The SO then checks whether the requirements for affiliation have been met and, if this is the case, issues a confirmation of affiliation.

4. Submitting the application to FINMA

The portfolio manager or trustee must upload the confirmation of affiliation from an SO in the EHP as a supplement to the authorisation application. This completes the application and the applicant has the option of submitting the application to FINMA via EHP, thus complying with the transitional period under Art. 74 para. 2 FinIA.

5. FINMA ruling

Following submission of the application for authorisation FINMA will conduct an audit of the application. The applicant will receive an initial response within 20 working days. Communication relating to additional information and documents will be via the EHP.

FINMA information event for portfolio managers and trustees who have become subject to supervision

FINMA will present the approval process at information events. These events will take place during the fourth quarter of 2019 and the first quarter of 2020 in French-speaking Switzerland, Ticino and German-speaking Switzerland and are aimed at portfolio managers and trustees who have become subject to supervision. You can access the documents presented at the November 2019 information events here.

To date, managers of the assets of collective investment schemes have been authorised and supervised by FINMA as asset managers of collective investment schemes under the Collective Investment Schemes Act (CISA). These institutions do not require any new authorisation. They must, however, meet the requirements of the legislation within one year of its entry into force.

Managers of the assets of collective investment schemes who have not previously been subject to the CISA because they did not reach the thresholds specified in the CISA will now have to be authorised by FINMA as portfolio managers or PMs (see Art. 24 para. 2 let. a FinIA).

They must report to FINMA within six months of the entry into force of this legislation. They must meet its statutory requirements within three years of its entry into force and submit a request for authorisation. They can continue to operate until a decision is reached on their authorisation, provided that they are affiliated to an SRO, as defined in Article 24 AMLA, and are supervised by this SRO in relation to compliance with the relevant requirements.

Portfolio managers of occupational pension schemes who were previously authorised by the OPSC will now require authorisation from FINMA as managers of collective assets provided that they manage occupational pension scheme assets of more than 100 million francs or manage more than 20% of the assets of an individual occupational pension scheme (see Art. 24 para. 2 let. b FinIA).

If these portfolio managers manage occupational pension scheme assets amounting to no more than 100 million francs and no more than 20% of the assets of an individual occupational pension scheme (see Art. 24 para. 2 let. b FinIA), they will now require authorisation from FINMA as portfolio managers or PMs.

All managers of occupational pension scheme assets must report to FINMA within six months of the entry into force of this legislation. They must meet its statutory requirements within three years of its entry into force and submit a request for authorisation. They can continue to operate until a decision is reached on their authorisation, provided that they are affiliated to an SRO, as defined in Article 24 AMLA, and are supervised by this SRO in relation to compliance with the relevant requirements.

The category of directly subordinated financial intermediaries (DSFIs), as defined in Article 2 para. 2 AMLA, will cease to exist following an amendment to the AMLA resulting from the FinIA.

DSFIs which are operating as asset managers or trustees when the FinIA enters into force – either independently or as part of a financial group subject to group supervision by FINMA must register with FINMA. These institutions must submit an affiliation request to a recognised self-regulatory organisation (SRO) within a year of FinIA coming into force, if they have neither received confirmation of being subject to supervision by a supervisory organisation (SO) nor requested authorisation from FINMA. They may continue to operate until a decision has been made regarding their application.

DSFIs which are operating as neither asset managers nor trustees when the amended legislation enters into force will have to affiliate to a recognised SRO. They must submit the corresponding request within one year. They can continue to operate until a decision is reached regarding their authorisation.

Institutions which are already authorised as securities dealers (as defined in Art. 2 let. d SESTA) when the FinIA enters into force will not require any new authorisation as investment firms. They must, however, meet the requirements of the FinIA within one year of its entry into force.

Apart from foreign fund management companies, foreign financial institutions may establish branches and representative offices in Switzerland.

Branch:

Pursuant to Art. 52 para. 1 FinIA, FINMA authorisation is required for financial institutions based abroad (foreign financial institutions) wishing to establish a branch in Switzerland in which they employ persons who regularly perform the following functions on a commercial basis in the name of the foreign financial institution in Switzerland or from Switzerland:

a. manage assets or act as a trustee;

b. manage the assets of collective investment schemes or pension schemes;

c. trade in securities;

d. conclude transactions; or

e. maintain customer accounts.

Representative office

Institutions which are already authorised as fund management companies (as defined in Art. 13 para. 2 let. a CISA) when the FinIA enters into force will not require any new authorisation. They must, however, meet the requirements of the FinIA within one year of its entry into force.

With the entry into force of the revi sed CISA, the obligation to appoint a representative and a paying agent will no longer apply to foreign collective investment schemes offered exclusively to qualified investors in Switzerland. Only foreign collective investment schemes which are offered in Switzerland to non-qualified investors or qualified investors in accordance with Art. 5 para. 1 FinSA (professional clients) must continue to appoint a representative and paying agent in Switzerland.

For representatives representing exclusively foreign collective investment schemes which are offered in Switzerland only to qualified investors, but not to professional clients pursuant to Art. 5 para. 1 FinSA, the authorisation requirement and thus the FINMA licence will cease to apply when there is compliance with the conduct and organisational requirements of FinSA (Art. 105 para. 3 let. e and Art. 106 para. 3 let. 3 FinSO).

However, individuals who provide financial services on behalf of their institution must register as client advisors in an advisor register.

The provisions relating to distributors of collective investment schemes in the CISA will be deleted in their entirety. Once the FinIA enters into force, the corresponding authorised entities will no longer be subject to supervision by FINMA. Distributors, like all other financial service providers, will have to comply with the new code of conduct provisions as set out in FinSA and may also have to add their names as client advisers to an adviser register. 

Ombudsman

Ombudsmen must be approved by the Federal Department of Finance (FDF).

When FinSA comes into force, current financial service providers must request affiliation to an ombudsman within six months of the ombudsman obtaining FDF approval.

New financial services providers must be affiliated to an ombudsman by no later than when they start their professional activity.