SFA criticises Collective Investment Schemes Act

The Swiss Funds Association (SFA) has strongly criticised aspects of Switzerland’s proposed Collective Investment Schemes Act (CISA), notably regarding discrimination against the Swiss financial sector and lack of measures to strengthen competitiveness.

Switzerland’s Federal Council published its proposal regarding a partial revision of the CISA on March 2, 2012 but the SFA has concluded that this only achieves certain objectives.

“Improvements must be made to prevent the loss of jobs and the migration of entire product categories,” a release from the SFA said.

Members of the SFA, established in Basel in 1992, include all the major Swiss fund management companies, many representatives of foreign collective investment schemes, and asset managers of collective investment schemes. It covers more than 95% of the fund assets distributed in Switzerland.

The Association said that many of the CISA provisions go beyond EU standards, or create specific Swiss features where there are no international standards. On distribution regulations and the liability requirements for custodian banks, the draft overshoots the target in many respects.

There are “no proposals whatsoever” for strengthening competitiveness in the value chain segments of asset management, administration and distribution of collective investment schemes, despite the fact that these were specifically covered in the Federal Council’s report on strategic directions for Switzerland’s financial market policy.

“We face major challenges in private banking and investment banking. In this difficult situation for the Swiss financial sector, asset management can be an important third mainstay. The partial revision of the CISA is therefore of great importance, and we must not make any mistakes here,” the SFA, led by CEO Mattheus den Otter, warned.

“We already lost key parts of the fund business to other countries once before. We do not want to see this happen again with regard to investors, asset management and funds for qualified investors, or in the case of distribution. We will be working together with the Swiss Bankers Association in this matter,” said SFA President Martin Thommen.

The Association has welcomed the new provisions on management and custody but the proposal contains new, discriminatory provisions on the distribution of collective investment schemes in or from Switzerland. These proposed regulations impair Swiss asset managers in institutional fund distribution by imposing a “globally applicable standard” of unprecedented strictness.

“Global fund distribution should not be constrained in an EU straightjacket,” warned Den Otter. The competitiveness of Switzerland as a production location for collective investment schemes must be improved if it is to hold its own in the pan-European market.

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