Since the beginning of 2020, portfolio managers and trustees operating on a commercial basis have needed a licence. When the Financial Institutions Act (FinIA) came into force, most institutions subject to the new licensing requirement benefited from a transitional period. FINMA has now finished processing the majority of the 1,699 applications received before the end of the transitional period. The new licensing requirements, which must be complied with at all times, primarily serve to protect investors from unfair business practices and to strengthen the reputation of the Swiss financial centre.
Since the entry into force of the FinIA on 1 January 2020, portfolio managers and trustees have needed a licence from FINMA to carry out their activities on a commercial basis. The law granted a transitional period of three years for existing institutions. Of the 1,699 applications received by the end of 2022, FINMA finished processing more than 94% by the end of February 2025.
“Thanks to the new licensing requirements, FINMA has established a high quality standard across the board. Anyone who entrusts their money to a portfolio manager or trustee should be able to assume that adequate minimum standards are in place and that these are monitored,” says FINMA CEO Stefan Walter.
Large number of applications at the end of the transitional period
Despite FINMA’s recommendation to commence the licensing process in good time (press release dated 16 September 2021), FINMA received more than half of the applications in the last four months of the three-year transitional period. The applications submitted later were of rather poor quality, which delayed their approval by FINMA. In more than 40% of the cases FINMA asked at least five times from the institutions for further amendments of the application. Of those 94 applications from the transitional period which are still pending, around half are the subject of investigations, e.g. because members of corporate bodies or the institutions themselves are respectively were involved in criminal proceedings.
Status of licences
As at 28 February 2025, FINMA had approved a total of 1,532 of the 1,864 applications submitted since the introduction of the licensing requirement. Specifically, 1,428 out of 1,699 institutions that submitted their application by the end of 2022 received a licence and 104 out of 165 institutions that submitted their application from the beginning of 2023. Around 8% of all applications submitted (131) were withdrawn by the institutions.
The Head of the Asset Management division, Marianne Bourgoz Gorgé, draws the following final conclusions: “A good two years after the end of the transitional period, of all the applications we received by the end of 2022, only those with either increased complexity or those that could not yet be approved due to slow feedback from applicants or lack of compliance with legal requirements are still pending. Those institutes may continue their activities until FINMA makes its final decision. FINMA will continue to work actively to ensure that progress is made in these cases. However, the majority of the licensing dossiers, over 94%, have now been concluded.”
The licensed institutions have already reported a number of changes that required FINMA’s prior approval. A total of 3,221 change requests were received. In the future, FINMA expects to receive around 1,700 change requests per year.
Ongoing and intensive supervision
The two-tier supervisory model provides for ongoing supervision (including auditing) of portfolio managers and trustees to be carried out in general by supervisory organisations (SOs) which themselves are authorised and supervised by FINMA. If there are indications of irregularities at institutions that the SO cannot remedy itself, it escalates the case to FINMA, which in turn restores compliance with the law at the licensed institution by taking further supervisory measures. The number of cases escalated by the SOs to FINMA for preliminary investigation and the number of institutions under FINMA’s intensive supervision increased significantly in the second half of 2024.
