Portfolio manager

Licensing requirements

The portfolio manager must comply with various requirements to receive a FINMA licence, including the following in particular. The trustee must:

• be legally classified as either a sole proprietorship, a trading company 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 its business activity including precise details of its operations and geographic layout in the relevant documents;
• provide proof of affiliation to an SO, thus confirming it is supervised by a supervisory organisation.

Exceptions to licensing requirements

There are exceptions to the portfolio manager licensing requirement. Persons acting as a portfolio manager do not need a licence, if they meet the following conditions:

• They exclusively manage assets held by persons either in a business or familial relationship with them;
• They exclusively manage assets assigned to employee participation plans;
• They manage assets within a legally regulated mandate.

Portfolio managers do not need a licence if they do not work on a commercial basis. A portfolio’s operation is deemed commercial, if: it achieves gross income in excess of CHF 50,000 per calendar year; has business dealings with more than 20 contractual parties per calendar year, which are not restricted to one activity, or maintains at least 20 such relationships per calendar year; or has unlimited power of disposal over assets belonging to others that exceed CHF 5 million at any time.

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, the institution will require another FINMA licence.

Change in circumstances

The licensing requirements must be complied with at all times. Licensed portfolio managers must report any change in circumstances that affects their FINMA licence to the supervisory organisation, which forwards the information to FINMA periodically. Prior approval from FINMA is required for material changes. The requesting portfolio manager must specify the types of change involved, describe the changes and the reasons for them, and submit the relevant documents.

Cessation of the activity requiring a licence

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

Submitting notifications and applications

Portfolio managers who have become subject to an authorisation requirement must notify FINMA within six months of the FinIA coming into force. This electronic notification process works in a similar way to the licensing and licensing amendment process is processed electronically via the EHP survey and application platform. All forms and information for submitting or changing a notification or an application are stored there. Confirmation of affiliation to an SO can be uploaded as an appendix to the licensing application. 

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

The application form must be submitted in an official language of the Swiss Confederation and signed by the portfolio manager or trustee. FINMA will process the application once it has been formally submitted in full. This does not preclude the possibility of the portfolio manager or trustee subsequently adding further information or of FINMA requesting such information.

Information and templates