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.
It is still unknown, however, whether the rules will be enough to ensure Switzerland’s fund rules are considered ‘equivalent’ by the EU once the AIFM directive is adopted. This is the factor that will decide how Swiss-based funds are sold into the EU from 2015 onwards, when adoption of a passporting scheme is expected to be offered to third countries.
If Switzerland does not have access to the EU market, Dobrauz fears managers may move out of the country. This is something that has already started to happen. “UK managers that came here for tax reasons, quality of life and so on are considering moving back because although the FSA [the UK’s Financial Services Authority] is not an easy regulator, you know what you are getting. In Switzerland there are still a lot of questions. If you go back to the UK you know you will have your AIFM directive passport,” he says.
“A lot of managers in German-speaking Switzerland are looking at Liechtenstein, which is in commuting distance, which takes all of these problems away because they are part of the harmonised market through the EEA membership.” Although Liechtenstein is not part of the EU it is a member of the European Economic Area (EEA). Switzerland is not.
Overall the changes are being welcomed. Dobrauz believes there will be opportunities for those wanting to raise money in Switzerland. “There is a lot of money around and it has to go somewhere because we have a bond bubble and equity markets suck.”
It is thought the amendments to Cisa will be applicable from early 2013.
This article first appeared in Hedge Funds Review