Swiss set to strengthen domestic asset management industry
Swiss trade organisations are set to secure market access for the country’s asset management industry to the emerging AIFM market.
Swiss authorities have recently published a proposal to amend the regulatory framework of the Swiss Collective Investment Schemes Act (CISA).
The aim is to guarantee regulatory equivalence with the forthcoming third-country provisions of the Alternative Investment Fund Managers Directive (AIFMD).
It is suggested that all Swiss-based asset managers who manage foreign funds will have to be authorised and supervised by the Swiss Financial Market Supervisory Authority (FINMA).
Dr Matthäus den Otter (pictured), chief executive of the Basel-based Swiss Funds Association (SFA), says there was renewed acceptance that asset management was different, but naturally complementary to the established banking brand for Switzerland. More could also be done to capitalise on local expertise.
However, he points out that the amendments to the CISA alone are not enough because Switzerland has no legislation comparable to MiFID.
Therefore, it is expected that another regulatory initiative will be launched soon for an “overarching law” for the many small- and medium-sized so-called independent asset managers who are currently not regulated within the next few years.
“Rather than be simply a domicile of choice, we have three key aims: to remain a very attractive centre for fund distribution, to encourage domestic asset managers of collective investment schemes, and to grow the domestic fund domiciliation base.”
Den Otter, speaking before the move on 6 September by the Swiss National Bank to cap the rise of the Swiss franc with an open-ended peg of CHF1.20/Euro, says Switzerland had recovered well from the financial crisis.
“We had no domestic banking crisis, but there were problems with Madoff and difficulties at UBS. Because we are not in the European Economic Area, we are lacking a European passport. Therefore, it has been difficult to grow market share in the funds industry.”
But there was now a determined search for new and fresh ideas. The SFA, the Swiss Bankers Association (SBA) and Swiss Insurance Association (SIA) want to ensure that the country has a vigorous asset management sector.
Switzerland is often cited as the preferred jurisdiction for creative and talented managers seeking escape from what they consider overly-restrictive regulations elsewhere.
It accounts for just 1% of single hedge funds globally, but more like 30% of fund of hedge funds globally.
London, where some 20% of the world’s single hedge funds are based, is seen as the prime loser from any such trend. But so far, a significant exodus has failed to materialise.