Portfolio manager

Anyone who acts as a portfolio manager on a commercial basis must be licensed by FINMA. This requires them to meet various financial, personnel-related and organisational requirements.
According to the law, portfolio managers are persons mandated to manage assets on a commercial basis in the name of and on behalf of clients or who manage the assets of collective investment schemes or occupational pension schemes below the defined thresholds.

Licensing requirements

Portfolio managers must comply with various requirements to receive a FINMA licence, including the following in particular. They must:

  • be legally classified as either a sole proprietorship, a commercial enterprise or a cooperative and entered as such in the commercial register;
  • be suitably organised with adequate risk management and internal controls;
  • have sufficient equity capital or securities;
  • describe their business activity including precise details of their operations and geographic layout in the relevant documents;
  • provide proof of affiliation to an SO, thus confirming they are supervised by a supervisory organisation.

Date of licensing

Portfolio managers require a licence from FINMA before they commence their commercial activities.

Portfolio managers who started their commercial activity before 1 January 2020 must apply for a licence from FINMA by the end of 2022, which includes proving that they are affiliated to an SO.

Those who started a commercial activity as a portfolio manager in 2020 must be affiliated to an SO by 6 July 2021 and submit a licence application to FINMA.

An activity is deemed commercial if it meets one of the following criteria:

Commercial nature of activity

Only portfolio managers who carry out their activity on a commercial basis require a licence. According to the law, portfolio managers are deemed to pursue their activities on a commercial basis if they:

  • generate gross earnings of more than CHF 50,000 per calendar year; or
  • establish business relationships with more than 20 contractual partners per calendar year, which are not restricted to a once-only activity, or they maintain at least 20 such relationships per calendar year; or
  • have unlimited power of disposal over assets belonging to others, which exceed CHF 5 million at any given time.
    Certain assets linked to exemptions to licensing requirements are not to be taken into account here.

The thresholds for operating on a commercial basis do not apply to managers of the assets of collective investment schemes or occupational pension schemes below the defined thresholds. Their activities are always deemed commercial, regardless of their scope.

Role

A portfolio manager’s main role is to manage individual portfolios. The portfolio manager may also assume other duties, for example investment advice, portfolio analysis or the provision of financial instruments. If a portfolio manager also works as a trustee, they will require another FINMA licence ((Link auf www.finma.ch/de/bewilligung/vermoegensverwalter-und-trustees/trustees)).

Cessation of the activity requiring a licence

If a portfolio manager wishes to cease operations, they require prior approval from FINMA. The supervisory organisation will also be asked to give its opinion.

Submitting applications

The licensing process for portfolio managers takes place via FINMA’s survey and application platform (EHP). Further details can be found on the ‘Licensing process’ page.

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