Amendments to the Swiss rules for funds will bring the market into line with the EU's AIFM directive which comes into force in July 2013. The revision includes changes to licensing and distribution.
Guenther Dobrauz-Saldapenna, senior manager of regulatory and compliance services at PricewaterhouseCoopers in Zurich, says all of his clients welcome the move to obtain licences. “There is not one of them that didn’t want the licence.”
He says they do not like the current setup where a Swiss-based manager with a fund domiciled offshore is only considered an adviser to the fund. “They have been building a track record for 20 years but they cannot appear on Bloomberg or go on CNBC because they are just the adviser.”
The SFA’s Den Otter also welcomes the changes to distribution rules. He believes a good balance has been struck in the final version of the amendments to Cisa.
“In the original revisions they were going to build a sort of ‘fortress of Switzerland’, a replica of the EU regulations even though the EU market is a market of 350 milllion consumers and investors,” he says. “We are a small country which needs to be open and remain open.”
Under the amendments Swiss “banks and financial advisers will have continued access to managers from abroad who want to present their product and activities to them,” according to Den Otter.
Changes are also being made to the definitions of qualified investors. High net worth investors are no longer automatically considered qualified investors but can opt to be treated as such. Purchase of alternative investment funds by an asset manager for a client with whom they have entered into a discretionary asset management will not be considered distribution, as was previoiusly considered.
Dobrauz says the changes to Cisa bring the Swiss market into line with the EU. This means the jurisdiction will “not be left behind” once the AIFM directive is implemented as it was when the Ucits regulations were first adopted in the EU.
“They have learned from the Ucits experience where Switzerland was pretty much wiped off the face of the planet by not being part of the Ucits framework.”