Swiss funds group urges caution over pending rule changes
Recent headlines about Switzerland have highlighted the slow death of banking secrecy, but its asset management industry is in just as much flux.
Bern and the industry’s regulator FINMA plan to subject Swiss asset managers to laws matching the EU’s Alternative Investment Fund Managers Directive (AIFMD). This will involve a partial revision of the Collective Investment Schemes Act (CISA), meaning asset managers will, by mid-2013, face wide-ranging independent regulation for the first time.
As in the AIFMD, planned changes in Switzerland encompass liability of Depot banks, a legal separation of ‘qualified investors’ from ‘mutual fund investors’, and mandatory supervision of managers.
The hope in Switzerland is that the revisions to domestic law will qualify the industry to market its non-Ucits funds freely in Europe, alongside EU rivals governed by AIFMD rules.
At least CHF469bn of Swiss funds could be affected. Out of a total collective investment, industry they are worth about CHF1.26trn. But practitioners say supervision and its costs will also mean small managers will close, migrate to larger houses or back to banks, or even relocate to centres such as London.
Switzerland’s asset managers are cautioning its authorities to tread carefully. Practitioners highlight the proposed changes – still up for round-table discussion in June – are even more strict than the EU laws.
The Swiss Funds Association (SFA) says: “Some of the proposed regulations cast aside good, well-established Swiss features. Regulations on distribution, in particular, have overshot the target. [The rules] are completely lacking in measures to strengthen competitiveness.”