951.311 — CISO
English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.
of 22 November 2006 (Last amended on 25 November 2025)
The Swiss Federal Council,
based on the Collective Investment Schemes Act of 23 June 2006 1 (CISA), 2
decrees:
Irrespective of its legal status, an investment club must meet the following requirements:
For the purpose of applying the CISA and irrespective of their legal status, operating companies which are engaged in entrepreneurial activities are companies:6
Operating companies are in particular companies which:
Operating companies are also companies which in the course of their operating activities avail themselves of the services of external service providers or of companies within their group, provided entrepreneurial decisions in day-to-day business operations remain at all times with the company itself by virtue of the express agreement of rights to influence legal relationships, to exert control and to issue directives.
Companies in accordance with Article 13 paragraph 2 letters c and d of the CISA 7 which assume control of the voting rights in companies or sit on the body responsible for the governance, supervision and control of their participations are not deemed to be operating companies.
In addition to their entrepreneurial activities, operating companies may also engage in investments. These may, however, merely represent a subordinate or accessory activity with respect to the main purpose.
Newly established investment companies whose issue prospectus provides for a listing on a Swiss stock exchange are treated as equivalent to listed companies provided listing is completed within one year.
Irrespective of legal status, collective investment schemes are assets provided by at least two mutually independent investors for the purpose of collective investment and which are managed externally.
Investors are mutually independent when they provide assets that are mutually independent in legal and de facto terms.
For group companies in the same group of companies pursuant to Article 3 of the Financial Institutions Ordinance of 6 November 2019 12 (FinIO), the requirement for the assets to be independent pursuant to paragraph 2 does not apply. 13
The assets of a collective investment scheme may be provided by a single investor (single investor fund) where such investor is an investor pursuant to Article 4 paragraph 3 letter b, e or f of the Financial Services Act of 15 June 2018 14 (FinSA). 15
The restriction of investor eligibility to investors as defined in paragraph 4 must be disclosed in the relevant documents pursuant to Article 15 paragraph 1 of the CISA.
Fund management companies, investment companies with variable capital (SICAVs), limited partnerships for collective investment (LPCIs) and investment companies with fixed capital (SICAFs) are responsible for ensuring that the collective investment schemes they manage comply at all times with the definition of a collective investment scheme in accordance with Article 7 CISA and this Article. 16
The financial intermediary:
Any party applying for authorisation under Article 13 CISA must submit the following documents to the Swiss Financial Market Supervisory Authority (FINMA):19
Any party authorised as a fund management company is exempted from the duty to obtain authorisation for representatives of foreign collective investment schemes.
The persons responsible for the administration and the management shall be suitably qualified for the envisaged activity on the basis of their education and training, experience and career history.
The envisaged activity at the authorised party as well as the nature of the intended investments must also be taken into account when assessing the requirements.
The executive board must comprise at least two persons. These persons must be resident in a place where they can in fact carry out their management duties properly.
The authorised signatories of the licensee must sign jointly.
The licensee must define its organisational structure in a set of organisational regulations. 27
It must employ personnel who are properly and suitably qualified for its activity.
FINMA may require that an internal audit be performed if required by the scope and nature of the activity.
In justified instances, it may grant derogations from these requirements.
The licensee must ensure it has proper and appropriate risk management, an internal control system (ICS) and compliance covering its entire business activities.
Risk management must be organised so that all material risks can be adequately identified, assessed, controlled and monitored.
The licensee shall separate the functions of risk management, the internal control system and compliance in functional and hierarchical terms from the operating units, in particular from the investment decisions function (portfolio management).
FINMA may grant derogations from these requirements in justified instances.
It may regulate the details of risk management, the internal control system and compliance. 29
Tasks are deemed to be delegated if the SICAV and the representatives of foreign collective investment schemes appoint a service provider to independently and permanently perform in full or in part a material task, thereby changing the circumstances underlying the authorisation.
Material tasks are deemed to be:
The SICAVs and the representatives of foreign collective investment schemes may delegate to third parties only those tasks which do not need to be within the decision-making remit of the body responsible for management or for governance, supervision and control.
Delegation must not impair the appropriateness of the operational organisation.
The operational organisation is no longer deemed to be appropriate if the SICAV or the representative of foreign collective investment schemes:
The SICAV or the representative of foreign collective investment schemes remains responsible for the fulfilment of supervisory duties and when delegating tasks shall safeguard clients' interests.
They shall agree with the third party in writing or in another form demonstrable via text which tasks are to be delegated. The following in particular are to be laid down in the agreement:
The SICAVs and the representatives of foreign collective investment schemes shall lay down in their organisational principles the tasks delegated as well as details of the possibility of subdelegation.
Delegation is to be organised so that the SICAV or the representative of foreign collective investment schemes, its internal auditors, the audit company and FINMA can inspect and review the delegated task.
The licensee has sufficient financial guarantees if it meets the relevant provisions regarding the minimum capital or minimum investment amount.
For foreign collective investment schemes, the following documents must be sub- mitted to FINMA for approval:
In the event of changes to the organisational structure, authorisation must be obtained from FINMA. The documents defined in Article 7 must be submitted to FINMA.
Changes to documents in accordance with Article 15 CISA must be submitted to FINMA, with the exception of:37
The licensees, with the exception of the custodian bank, shall report:
The custodian bank shall report any change of executive persons entrusted with the performance of the custodian bank's duties (Art. 72 para. 2 CISA).
Furthermore, changes to the prospectus as well as to the key information document must also be reported in accordance with Articles 58–63 and 66 FinSA 41 . 42
The representatives of foreign collective investment schemes that are not offered exclusively to qualified investors must report:43
The report must be made immediately to FINMA, which shall establish whether the reported facts comply with the Act.
The simplified approval procedure may only be adopted where the fund regulations:
FINMA shall give the applicant confirmation of its receipt of the application.
Where additional information is required for the purpose of assessing the application, FINMA may instruct the applicant to submit such information at a subsequent time.
Open-ended collective investment schemes for qualified investors are deemed to have been approved on expiry of the following time limits:
FINMA shall approve open-ended collective investment schemes which are directed towards the public at the latest within the following time limits:
The period begins one day following receipt of the application.
Where FINMA requires further information, the commencement of the period must be postponed from the time the request is made until such time as the information is received by FINMA.
FINMA may demand that a subsequent amendment be made to the documents for collective investment schemes for qualified investors for a period of up to three months following simplified approval.
The investors must:
In the case of a company limited by shares and a partnership limited by shares, the capital is the share and participation capital, and in the case of a limited liability company it is the issued capital.
In the case of partnerships, the capital is:50
The capital accounts and assets of the partners with unlimited liability may only be counted towards the capital if a declaration is provided to the effect that:51
The declaration in accordance with paragraph 3 is irrevocable. It must be made in writing or in another form demonstrable via text and filed with a licensed audit company. 53
Legal entities may include the following in qualifying capital:
Partnerships may include the following in qualifying capital:56
… 58
The qualifying capital as defined in paragraphs 1 and 2 letters a–d must account for at least 50 per cent of the total required.
The following shall be deducted when calculating capital adequacy:
Persons who manage Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, may only purchase investments from collective investment schemes at the market price for their own account and may only sell such investments from their own portfolios at the market price. 69
In relation to services delegated to third parties they shall waive the compensation owed to them in accordance with the fund regulations, company agreement, investment regulations or discretionary management agreement where such compensation is not used for payment of the services rendered by such third parties .
Where investments of a collective investment scheme are transferred to another scheme of the same licensee or a scheme belonging to a related licensee, no costs may be levied.
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes or their agents, may not levy any issue or redemption fees if they purchase target funds which:70
When a management fee is levied on investments in target funds pursuant to paragraph 4, Article 73 paragraph 4 applies accordingly. 72
FINMA regulates the details. It may declare that paragraph 4 and 5 also applies to other products. 73
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, must exercise due diligence in selecting counterparties for securities transactions and other transactions. They must ensure that the best possible result is achieved in financial, time and quality terms when executing securities transactions and other transactions.
In financial terms, in addition to the price of the financial instrument, they must also take into account the costs associated with the execution of the order as well as third-party compensation.
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, may calculate the fees payable to closely connected natural or legal persons that participate in the planning, construction, purchase or sale of a building for the account of the collective investment scheme; the fees shall be based exclusively on the normal prices prevailing in the sector. 75
The valuation expert shall check the fee invoice prior to settlement thereof and if necessary furnish the licensee and the audit company with a report.
Where real estate investments of a collective investment scheme are transferred to another scheme of the same licensee or a related licensee, no compensation may be levied for buying and selling work undertaken.
Payments by real estate companies to the members of their administration, to their management and to their personnel shall be included in the compensation to which the fund management company and the SICAV are entitled in accordance with the fund regulations.
Pursuant to Article 63 paragraph 4 of the CISA, FINMA may in justified individual cases grant an exemption from the ban on transactions with closely connected persons pursuant to Article 63 paragraphs 2 and 3 of the CISA if:
Following conclusion of the transaction, the fund management company or SICAV prepares a report containing the following:
As part of its audit of the fund management company or SICAV, the audit company confirms adherence to the special duty of loyalty in relation to real estate investments.
The approved transactions with closely connected persons are mentioned in the annual report of the collective investment scheme.
In the case of properties where the fund management company, SICAV or persons closely connected thereto have construction projects carried out, FINMA may not grant any exemptions from the prohibition of transactions with closely connected persons. 77
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, must take effective organisational and administrative measures to identify, prevent, settle and monitor conflicts of interest in order to prevent the latter from harming the interests of the investors. Where conflicts of interest cannot be avoided, they shall be disclosed to the investors.
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, must ensure the effective separation of the activities of decision-making (asset management), implementation (trading and settlement) and administration.
FINMA may regulate the details and in justified individual instances permit exemptions or order the separation of additional functions.
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, must draw investors' attention to the risks associated with a specific type of investing in particular. 81
They shall disclose all costs incurred on the issue and redemption of units and in the administration of the collective investment scheme. In addition, they shall disclose the manner in which the management fee is used and the levying of any performance fee.
The duty of disclosure with regard to compensation for distribution of collective investment schemes encompasses the nature and scale of all fees and other pecuniary benefits through which the activities of the distributor are to be compensated.
Persons who manage or represent Swiss collective investment schemes or hold the assets of these schemes in safekeeping, or who manage or represent foreign collective investment schemes, or their agents, must ensure a degree of transparency in the exercising of membership and creditors' rights such that investors are in a position to comprehend the manner in which such rights are exercised. 82
(Art. 25 para. 3 CISA)
investment fund or the subfund of an umbrella fund must be issued for subscription (launch) within one year of approval by FINMA.
The investment fund or subfund of an umbrella fund must have net assets of at least 5 million Swiss francs at the latest one year following its launch.
FINMA may extend the time limits for a corresponding application.
Following expiry of the time period as defined in paragraphs 2 and 3, the fund management company shall notify FINMA of any shortfall forthwith.
In particular, the fund contract contains the following information:
When approving the fund contract, FINMA shall only verify the provisions pursuant to paragraph 1 lit. a–g and ensure their compliance with the Act.
When approving a contractual fund, FINMA, at the fund management company’s request, shall verify all provisions of the fund contract and ensure their compliance with the Act where the fund is to be offered abroad and such action is required under foreign law. 87
FINMA may formalise the content of the fund contract in accordance with international developments.
The fund contract sets out the permitted investments:
For other funds as defined in Article 68–71 CISA and Limited Qualified Investor Funds (L‑QIF) as defined in Article 118 a CISA, it also sets out information on the special features and risks of the individual investments in terms of their characteristics and valuation. 88
The fund contract sets out the permitted investment techniques and instruments.
The following may be charged to the assets of the fund or any subfunds:
Where explicitly provided by the fund contract, the following incidental costs may be charged to the assets of the fund or the subfunds:
In the case of real estate funds and L-QIF with real estate investments, where explicitly provided by the fund contract, the following incidental costs may additionally be charged to the assets of the fund or the subfunds:103
Where explicitly provided by the fund contract and where the activity is not performed by third parties, the management company of a real estate fund or an L-QIF with real estate investments may levy a fee for its own efforts in connection with the following activities:108
The fund contract sets out the fees and incidental costs in a single, comprehensive overview, providing a breakdown by type, maximum amount and calculation.
Use of the term «all-in fee» is only permissible if it includes all fees with the exception of issue and redemption fees but including incidental costs. If the term «flat fee» is used, specific information must be provided indicating which fees and incidental costs it does not include.
The fund management company, manager of collective assets and custodian bank may pay commissions only as reimbursement for the fund’s distribution activities and only if this specifically provided for in the fund contract.
The investors may be charged for the following:
The fund contract describes in a comprehensible, transparent manner the fees that may be charged to the investors, as well as their scale and the method of calculation.
The prospectus for the investment fund must specify one or more media of publication in which the information required by the CISA and this Ordinance shall be made available to investors. 112 The media of publication may be print media or electronic platforms that are publicly accessible and recognized by FINMA. 113
All facts which are subject to the disclosure requirement, and in relation to which investors are entitled to lodge objections with FINMA, in addition to the dissolution of an investment fund, must be published in the media of publication intended for such purpose.
The fund management company may create, liquidate or merge unit classes subject to the consent of the custodian bank and the approval of FINMA. In doing so it shall address the following specific criteria: cost structure, reference currency, currency hedging, distribution or reinvestment of income, minimum investment or investor eligibility.
The procedural details are set out in the prospectus. The risk that a class may be liable for another class must be specifically disclosed in the prospectus.
The fund management company announces the creation, dissolution or merging of unit classes in the media of publication. Only a merger is deemed to be an amendment to the fund contract, and is governed by Article 27 CISA.
Article 112 paragraph 3 a -c applies accordingly.
… 114
The fund management company shall publish any amendment to the fund contract in the media of publication of the relevant fund in the form specified by the CISA. 115 In this publication, the fund management company shall inform investors in a clear, comprehensible manner about which amendments to the fund contract are covered by FINMA’s verification and ascertainment of compliance with the Act. 116
Amendments that are required by law, provided such amendments do not affect the rights of investors or are of an exclusively formal nature, may be exempted by FINMA from the duty to publish. 117
The period in which objections to the amendment of the fund contract may be lodged commences on the day following announcement in the media of publication.
When approving the amendment to the fund contract, FINMA shall only verify the amendments to the provisions pursuant to Article 35 a paragraph 1 lit. a–g and ensure their compliance with the Act. 118
Where in relation to the approval of a fund contract pursuant to Article 35 a paragraph 3 FINMA has verified all provisions and ensured their compliance with the Act, it shall also in relation to the amendment to such fund contract verify all provisions and ensure their compliance with the Act if the investment fund is to be offered abroad and such action is required under foreign law. 119
In its decision FINMA specifies the date on which the amendment to the fund contract enters into force.
The self-managed SICAV performs its own administration. It may only delegate portfolio management in accordance with Article 36 paragraph 3 CISA to a manager of collective assets that is subject to a recognised supervisory body.
The externally managed SICAV delegates administration to an authorised fund management company. Administration also includes distribution of the SICAV. In addition, the externally managed SICAV delegates portfolio management to the same fund management company or to a manager of collective assets that is subject to a recognised supervisory body.
The provisions of Article 64 are reserved.
A SICAV may only manage its own assets or those of its subfunds. It is specifically prohibited from rendering services pursuant to Article 26 and 34 of the Financial Institutions Act of 15 June 2018 123 (FinIA) on behalf of third parties.
In relation to the minimum assets of a SICAV, Article 35 applies accordingly.
In respect of a self-managed SICAV and an externally managed SICAV that delegates administration to an authorised fund management company and portfolio management to another manager of collective assets, company shareholders must provide a minimum investment amount of 500,000 Swiss francs at the time of formation.
Where the externally managed SICAV delegates administration and portfolio management to the same authorised fund management company, company share- holders must provide a minimum investment amount of 250,000 Swiss francs at the time of formation.
The minimum investment amount must be maintained at all times.
A SICAV shall notify FINMA of any shortfall immediately.
The holdings provided by the company shareholders are included in the capital.
The following must be deducted from the capital:
The self-managed SICAV calculates the required level of capital adequacy in accordance with Article 59 of the Financial Institutions Ordinance of 6 November 2019 126 (FinIO). 127
An externally managed SICAV that delegates administration to an authorised fund management company and portfolio management to a manager of collective assets calculates the required level of capital adequacy in accordance with Article 59 FinIO. It may deduct 20 per cent from this amount. 128
An externally managed SICAV that delegates portfolio management to a bank pursuant to the Federal Banking Act of 8 November 1934 129 or to a securities firm pursuant to the FinIA 130 with its registered office in Switzerland may be exempted by FINMA from the duty to include its own resources in the assets. 131
Where an externally managed SICAV delegates administration and portfolio management to the same authorised fund management company, it is not required to include its own resources in the assets (Art. 59 para. 4 FinIO). 132
The prescribed ratio between the equity and total assets of a self-managed SICAV as well as an externally managed SICAV that delegates administration to an authorised fund management company and portfolio management to a manager of collective assets shall be maintained at all times. 133
A SICAV notifies FINMA of capital inadequacy immediately.
FINMA regulates the details.
All shares have the same net issue price at the time of initial issue of their category, irrespective of whether they belong to different categories. This represents the issue price payable by the investors at the time of issue less any fees and incidental costs.
Articles 37 and 38 apply accordingly.
Company shareholders may redeem their shares if:
Investments by a subfund in other subfunds of the same SICAV do not constitute an investment in treasury shares.
Article 39 applies accordingly.
Where provided by the articles of association, a SICAV may create, dissolve or merge share classes with the approval of FINMA.
Article 40 applies accordingly. The merger requires the approval of the general meeting of shareholders.
The risk that a class of shares may be liable for another class must be disclosed in the prospectus.
Shareholders have the right to vote on:
If the share of voting rights assigned to a subfund differs significantly from the share of assets assigned to the subfund, the shareholders may at the general meeting resolve to split or merge the shares of a share category in accordance with paragraph 1 letter b. FINMA must give its consent for such decision to be valid.
FINMA may order the splitting or merging of shares in a share class.
In relation to the custodian bank, Article 15 paragraph 2 of the present Ordinance and Article 53 FinIO 136 apply accordingly.
The content and approval of the investment regulations are based on the provisions on the fund contract, unless the CISA or articles of association provide otherwise. 138
When convening the general meeting, the SICAV informs shareholders in the form prescribed in the articles of association about:139
Paragraphs 1 and 2 apply to the articles of association accordingly, provided the latter regulate the contents of the investment regulations.
The articles of association may provide for general meetings in respect of individual subfunds where decisions are involved which affect only such subfunds.
Shareholders which together hold at least 10 per cent of the votes of all or some subfunds may request that items be included on the agenda for discussion at the general meeting of the SICAV or subfund.
The general meeting of the SICAV or subfunds is responsible for amending the investment regulations provided such amendment:
In the media of publication, the SICAV publishes the material amendments to the fund regulations resolved by the general meeting and approved by FINMA, indicating the offices from which the amended wording may be obtained free of charge.
The provision regarding important resolutions passed by the general meeting of a company limited by shares (Art. 704 of the Swiss Code of Obligations 141 , CO) does not apply. 142
The board of directors has the following tasks:
The tasks laid down in paragraph 1a–c may not be delegated.
In a self-managed SICAV, the tasks defined in paragraph 1 letters d and e, in addition to the administrative sub-tasks defined in paragraph 1 letter f, specifically risk management, the structuring of the internal control system (ICS) and compliance, may only be delegated to the executive board.
In relation to the organisational structure of a self-managed SICAV, Article 51 paragraph 1, Article 52 paragraph 1 and Article 53 FinIO 147 apply accordingly. 148
Articles 32 and 35 FinIA 150 apply accordingly to the delegation of tasks.
Unless specified otherwise, the percentage restrictions given in this chapter relate to the fund assets at market values; they must be maintained at all times.
If the limits are exceeded as a result of market changes, the investments must be restored to the permitted level within a reasonable period, taking due account of the investors' interests.
If the investment regulations are actively violated, in particular through purchases or sales, the investments must be immediately restored to the permitted level. If investors are not compensated for any loss incurred as a result of such an active investment violation, the investment violation must be reported to the audit company immediately and published in the media of publication as soon as possible. The report and publication must include a specific description of the investment violation and the loss incurred by the investors. All active investment violations must be reported in the annual report. 152
Securities funds and other funds must comply with the investment restrictions within six months of launch.
Real estate funds must comply with the investment restrictions within two years of launch.
FINMA may extend the time limits specified in paragraphs 3 and 4 at the request of the fund management company and the SICAV.
With regard to the administration of collective investment schemes, the fund management company and the SICAV may deploy subsidiaries whose sole object is the holding of assets for collective investment. FINMA regulates the details.
A SICAV may acquire movable and non-movable assets which are essential for the direct performance of its operations. FINMA regulates the details.
Umbrella funds may only comprise subfunds of the same type.
The following types of fund qualify:
In the case of collective investment schemes which include subfunds, the investment restrictions and techniques for each individual subfund apply.
The following investments are permitted:
The following are not permitted:
Investments in assets other than those named in paragraph 1 may not exceed 10 per cent of the fund's total assets.
... 153
Securities are deemed to be equity or debt securities pursuant to Article 54 paragraph 1 CISA which embody a participation right or claim or the right to acquire such securities and rights by way of subscription or exchange, specifically warrants.
Investments in securities from new issues are permitted only if the terms of issue provide for their admission to a stock exchange or other regulated market which is open to the public. If one year following purchase they are not yet admitted on the stock exchange or other market open to the public, such securities must be sold within one month.
FINMA may formalise the permitted investments for a securities fund in accordance with the laws currently in force in the European Communities. 154
Derivative financial instruments are permitted if:
In the case of transactions involving OTC derivatives, the following conditions shall be complied with in addition:
A securities fund's overall exposure associated with derivative financial instruments may not exceed 100 per cent of the net assets. The overall exposure may not exceed 200 per cent of the fund's total net assets. When taking account of the possibility of temporary borrowing amounting to no more than 10 per cent of the net assets (Art. 77 para 2), the overall exposure may not exceed 210 per cent of the fund's total net assets.
Warrants must be treated in the same manner as financial instruments.
The fund management company and the SICAV may only invest in target funds if:
They may invest a maximum of:
In relation to investments in target funds, Articles 78-84 do not apply.
If, in accordance with the fund regulations, a significant portion of the fund assets may be invested in target funds:
A feeder fund is a collective investment scheme that by way of derogation from Article 73 paragraph 2 letter a invests at least 85 per cent of the fund’s assets in units of the same target fund (master fund).
The master fund is a Swiss collective investment scheme of the same type as the feeder fund but is not itself a feeder fund and does not hold any units in such a fund.
A feeder fund may invest up to 15 per cent of its fund assets in liquid assets (Art. 75) or derivative financial instruments (Art. 72). The derivative financial instruments may only be used for hedging purposes.
FINMA regulates the details.
The fund management company and the SICAV may acquire money market instruments if these are liquid and can be valued and are traded on a stock exchange or other regulated market that is open to the public.
Money market instruments that are not traded on a stock exchange or other regulated market that is open to the public may only be acquired if the issue or the issuer is subject to provisions regarding creditor or investor protection and if the money market instruments are issued or guaranteed by:
Liquid assets comprise bank credit balances and claims arising from repurchase agreements at sight or on demand with maturities of up to twelve months.
Securities lending and repurchase agreements may only be used for the efficient management of the fund's assets. The custodian bank is liable for the proper, efficient settlement of securities lending and repurchase transactions.
Banks, brokers, insurance institutions and securities clearing organisations may be used as borrowers in the context of securities lending, provided they specialise in securities lending and furnish collateral which corresponds to the scope and risk of the proposed transactions. Repurchase transactions may be conducted under the same conditions with the institutions mentioned.
Securities lending and repurchase transactions are governed by a standardised framework agreement.
The fund contract or the investment regulations and the prospectus must contain the following information on securities lending and repurchase transactions:
The annual report and the semi-annual report of the collective investment scheme must contain the following information on the securities lending and repurchase transactions carried out by the fund management company or the SICAV for the account of the collective investment scheme:
At the expense of a securities fund:
Securities funds may borrow the equivalent of up to 10 per cent of the net assets on a temporary basis.
Securities lending and repurchase agreements in the form of reverse repos are not deemed to be lending pursuant to paragraph 1 a .
Repurchase agreements in the form of repos pursuant to paragraph 2 are deemed to be borrowing unless the funds obtained are used as part of an arbitrage transaction for the acquisition of securities of a similar type in connection with a reverse repo. 162
Including the derivative financial instruments, the fund management company and the SICAV may invest up to 10 per cent of the fund's assets in securities or money market instruments of the same issuer.
The total value of the securities and money market instruments of the issuers in which more than 5 per cent of the fund's assets are invested may not exceed 40 per cent of the fund's assets. This limit does not apply to sight or time deposits as defined in Article 79 or to transactions in OTC derivatives as defined in Article 80, to which the counterparty is a bank as defined in Article 70 paragraph 1 e .
The fund management company and the SICAV may invest up to 20 per cent of the fund's assets in sight and time deposits held with the same bank. Investments in bank deposits (Art. 70 para. 1 let. e) in addition to liquid assets (Art. 75) are both subject to this limit.
The fund management company and the SICAV may invest up to 5 per cent of the fund's assets in OTC transactions with the same counterparty.
Where the counterparty is a bank as defined in Article 70 paragraph 1 e , this limit is raised to 10 per cent of the fund's assets.
The derivative financial instruments and claims against counterparties arising from OTC transactions are subject to the regulations on risk diversification as defined in Articles 73 and 78-84. This does not apply to derivatives on indices which comply with the conditions defined in Article 82 paragraph 1 letter b.
Where the claims arising from OTC transactions are hedged using collateral in the form of liquid assets such claims are not included in the calculation of counterparty risk. FINMA regulates the details of the collateral requirements. In doing so, it shall take account of international standards. 163
Investments, deposits and claims in accordance with Articles 78–80 from the same issuer may not exceed 20 per cent of the fund's overall assets.
Investments and money market instruments in accordance with Article 78 from the same group of companies may not exceed 20 per cent of the fund's overall assets.
The limits defined in Articles 78–80 and 83 paragraph 1 may not be accumulated.
In the case of umbrella funds, these limits apply to each individual subfund.
Companies which form a group in accordance with international accounting regulations are deemed to be a single issuer.
The fund management company and the SICAV may invest a maximum of 20 per cent of the fund's assets in securities or money market instruments from the same issuer if:
The limit is increased to 35 per cent for any securities or money market instruments from the same issuer where such instruments strongly dominate regulated markets. This exemption only applies in relation to a single issuer.
The investments defined in this article are not considered when observing the limit of 40 per cent defined in Article 78 paragraph 2.
The fund management company and the SICAV may invest up to 35 per cent of the fund's assets in securities or money market instruments of the same issuer provided such instruments are issued or guaranteed by:
Subject to the approval of FINMA, they may invest up to 100 per cent of the fund's assets in securities or money market instruments of the same issuer. In such event the following rules must be observed:
Provided the protection of investors is not endangered, FINMA grants authorisation.
The investments defined in this article are not considered when observing the limit of 40 per cent defined in Article 78 paragraph 2.
Neither the fund management company nor the SICAV may acquire equity securities representing more than 10 per cent of the overall voting rights in a company or which would enable it to exert a material influence on the management of an issuing company.
FINMA may grant an exception provided the fund management company or the SICAV provides evidence that it does not exert a material influence.
The fund management company and the SICAV may acquire the following on behalf of the fund assets:
The limit defined in paragraph 3 does not apply if, at the time of acquisition, the gross amount of the debt instruments, the money market instruments or the units in other collective investment schemes cannot be calculated.
The limits defined in paragraphs 1 and 3 do not apply to securities and money market instruments which are issued or guaranteed by a country or public body belonging to the OECD or by international public bodies of which Switzerland or a member state of the European Union is a member.
The prospectus must provide information about the categories of investment instruments in which the fund is invested and whether transactions involving derivative financial instruments are conducted. Where transactions involving derivative financial instruments are conducted, an explanation must be given as to whether such transactions are conducted as part of the investment strategy or for the hedging of investment positions, and how the use of such instruments affects the risk profile of the securities fund.
Where the fund management company or the SICAV are permitted to invest the fund's assets primarily in investments other than those defined in Article 70 paragraph 1 letters a and e, or where they constitute an index fund (Art. 82), specific reference must be made to this fact in the prospectus and in the advertising material.
Where the net assets of a securities fund exhibit high volatility or a high leverage effect owing to the composition of the investments or the investment techniques applied, specific reference must be made to this fact in the prospectus and in the advertising material.
The investments of real estate funds or real estate SICAVs must be specifically named in the fund regulations. 164
The following real estate, which is entered on the basis of the registration of the fund management company, SICAV or fund management company appointed by the SICAV pursuant to paragraph 2bis, is deemed to be real estate pursuant to Article 59 paragraph 1 letter a CISA:165
The real estate must be entered in the Land Register under the name of the fund management company or SICAV with a remark to the effect that it belongs to the real estate fund. Where the real estate fund or SICAV under whose name the real estate is registered has subfunds, the subfund to which the real estate belongs must be specified. 166
The following investments are also permitted:
Paragraph 2 bis applies by analogy to mortgage notes or other contractual charges on property. 167
Undeveloped plots of land belonging to a real estate fund must be connected to the infrastructure network and suitable for immediate development and must also possess legally effective planning permission for their development. Construction work must commence prior to the expiry of the period for which the relevant planning permission is valid. 168
Real estate funds must spread their investments over at least ten properties. Residential estates which have been built using the same principles of construction and neighbouring plots of land are deemed to be a single property.
The market value of a single property may not exceed 25 per cent of the fund's assets.
The following limits expressed as a percentage of the fund's assets apply to the investments defined in a–d:
The investments defined in paragraph 3 letters a and b may together account for up to 40 per cent of the fund's assets. 170
FINMA may grant exemptions in justified individual instances.
The fund management company and the SICAV are deemed to exert a dominant influence if they have a majority of the co-ownership shares and votes.
In a set of rules governing use and administration as defined in Article 647 paragraph of the Swiss Civil Code (CC) 171 they shall retain all rights, measures and actions provided for in Articles 647 a –651 CC.
The right of pre-emption pursuant to Article 682 CC may not be suspended under contract.
Co-ownership of common facilities associated with properties held by the collective investment scheme which are part of a more extensive development must not grant a controlling influence. In such cases, the right of pre-emption pursuant to paragraph 3 may be suspended under contract.
Liabilities are deemed to be borrowings, obligations from business activities, in addition to all claims arising from units on which notice has been given.
Short-term fixed interest securities are deemed to be debt securities with a term or residual term to maturity of up to twelve months.
Funds available at short notice are deemed to be cash on hand, postal check 172 and bank account deposits at sight and on demand with maturities of up to twelve months, as well as guaranteed credit facilities with a bank for up to 10 per cent of the fund's net assets. The credit facilities must be included in the maximum level of pledging permitted pursuant to Article 96 paragraph 1.
Fixed-income securities with a term or residual term to maturity of up to 24 months may be held as collateral for impending construction projects.
Derivative financial instruments are permitted for the hedging of interest rate, currency, credit and market risk. The provisions applicable to securities funds (Art. 72) apply accordingly.
In particular, closely connected persons include:
Agents pursuant to paragraph 1 letter a are not deemed to be closely connected persons if evidence can be provided that they neither exert nor have exerted direct or direct influence on the fund management company or the SICAV and the fund management company or SICAV are not biased in the matter in any other way.
Real estate which the fund management company or SICAV wish to purchase must be valued in advance. 175
The valuation expert shall physically inspect the property when performing the valuation.
In the event of a sale, a new valuation may be waived if:
The fund management company and the SICAV must explain to the audit company for the reason for any sale price which is below the estimated valuation or purchase price which is above such valuation.
The market value of the properties belonging to the real estate fund must be reappraised by the valuation experts at the end of each accounting year.
The properties must be physically inspected by the valuation experts at least every three years.
The valuation experts must provide the audit company with justification for their method of valuation.
Where the fund management company and the SICAV do not adopt the revised valuation figure in their accounts, they must explain this to the audit company.
In relation to construction projects, the fund management company and the SICAV shall instruct at least one valuation expert to examine whether or not the probable costs are reasonable and in accordance with the prevailing market situation.
Following the completion of the building, the fund management company and the SICAV shall instruct at least one valuation expert to assess the market value.
The fund management company and the SICAV shall publish in the media of publication the market value of the fund's assets and resulting net asset value of the fund units simultaneously with the announcement to the bank or securities firm entrusted with the regular on and off-exchange trading of the units of the real estate fund. 180
In relation to real estate funds which are traded on a stock exchange or other regulated market open to the public, the relevant regulations governing stock trading must also be observed.
In relation to pledging land and ceding the rights of lien as collateral pursuant to Article 65 paragraph 2 CISA, the encumbrance may not exceed on average one third of the market value of all real estate assets. 181
To safeguard liquidity, the charge may be temporarily and exceptionally increased to half the market value where:
As part of its audit of the real estate fund, the audit company expresses its opinion on the conditions pursuant to paragraph 1 bis . 183
Where the fund management company and the SICAV commission the construction of buildings or carry out the refurbishment of buildings, they may during the period of preparation, construction or refurbishment credit the income statement of the real estate fund for building land and buildings under construction at the prevailing market rate, provided the costs do not exceed the estimated market value as a result.
Units may be issued at any time. This may only be effected in tranches.
The fund management company and SICAV shall specify at least:
The valuation experts shall review the market value of each property in order to calculate the net asset value and determine the issue price.
Units on which notice has been given in the course of an accounting year may be redeemed early by the fund management company and the SICAV at the close of said accounting year, providing:
The following investments are specifically admitted for other funds:
In the case of other funds for alternative investments, FINMA may admit other investments such as commodities and the corresponding commodity certificates. 185
Investments as defined in Article 69 paragraph 2 CISA must be explicitly named in the fund regulations.
In the case of investments in units of collective investment schemes, Article 73 paragraph 4 applies accordingly.
Other funds for traditional investments may:
Other funds for alternative investments may:
The investment restrictions shall be set out explicitly in the fund regulations. Such regulations shall also govern the nature and scale of short-selling permitted.
FINMA may in individual cases grant a derogation from the regulations pertaining to:
The notice regarding special risks (warning clause) requires the approval of FINMA.
The warning clause must be placed on the first page of the fund regulations, the prospectus and the key information document in accordance with Articles 58–63 and 66 FinSA 188 , and in all cases in the form in which it was approved by FINMA. 189
The custodian bank must have an organisational structure that is appropriate to its tasks and employ personnel who possess suitable, relevant qualifications for their activity.
For the fulfilment of its activities as custodian bank, it has at least three full-time employees with signatory powers.
The custodian bank shall notify the audit company of the executive persons entrusted with the tasks of custodian bank activity.
The custodian bank has the following tasks:
In the case of real estate funds and L-QIF with real estate investments, it shall be responsible for the safekeeping of mortgage notes against which no loans have been raised, in addition to the shares in real estate companies. It may hold accounts with third parties for the purpose of the ongoing management of real estate assets. 192
In the case of collective investment schemes comprising subfunds, all duties shall be performed by the same custodian bank.
Article 41 applies accordingly to the change in custodian bank of a contractual fund.
The decision to change custodian bank shall be published immediately in the media of publication of the SICAV.
Where the custodian bank transfers safekeeping of the fund’s assets to a third-party custodian or central securities depository in Switzerland or abroad, it shall verify and monitor whether the latter:194
Units or unit classes of an open-ended collective investment scheme that are permanently listed on a Swiss stock exchange and for which at least one market maker in accordance with Article 41 letter c FinIA 196 ensures that the value of the traded units or unit classes does not deviate significantly from the indicative net asset value are deemed to be exchange-traded funds (ETFs).
A collective investment scheme may only be designated as an ‘exchange-traded fund’ or ‘ETF’ if all units or unit classes are structured as ETFs.
The prospectus must contain the following information on ETFs in particular:
For ETFs that track an index, the prospectus must also contain information on:
If the ETF is actively managed, this must be stated in the fund contract or in the investment regulations, in the prospectus, in the key information document and in the advertising. The details of the implementation of the investment policy must also be included in the prospectus.
If a collective investment scheme contains both ETF and non-ETF unit classes, then:
The paying agent shall be a bank under the Federal Act on Banks and Savings Banks of 8 November 1934 201 . 202
Where the fund regulations provide for the delivery of unit certificates, the custodian bank, at the investor’s request, certifies his or her rights in securities (Art. 965 CO 203 ) without par value, in registered form and structured as order instruments (Art. 967 and 1145 CO). 204
Unit certificates may only be issued after payment of the issue price.
The issuing of fractions of units shall only be permitted in the case of investment funds.
The fund management company or the SICAV must ensure the appropriate management of liquidity for each collective investment scheme it manages by means of a process.
In particular, the process must provide that:
The fund management company or the SICAV must carry out appropriate stress tests at regular intervals for each collective investment scheme it manages. These are based on normal and exceptional market conditions and are based on historical and hypothetical scenarios. Stress tests may be waived if the fund’s net assets of the managed collective investment scheme do not exceed CHF 25 million.
The fund management company or the SICAV must draw up a crisis plan in which it defines the measures for the use of the intended liquidity management instruments as well as the processes and internal responsibilities. It must regularly review the crisis plan to ensure that the liquidity management instruments can be deployed promptly and properly if necessary.
FINMA may regulate the details.
The regulations of a collective investment scheme whose value is difficult to ascertain, or which has limited marketability, may provide for notice to be served only on specific dates, subject to a minimum of four times per year.
FINMA may in the event of a justified request restrict the right to redeem at any time depending on the investments and investment policy. This shall apply specifically in the case of:
Where the right to redeem at any time is restricted, such fact must be stated explicitly in the fund regulations, in the prospectus and in the key information document. 206
The right to redeem at any time may be suspended for a maximum of five years.
The fund management company and the SICAV may permit a pro rata cutting off of redemption applications on reaching a specific percentage or threshold on a specific trading day in exceptional circumstances if this is in the interests of the remaining investors (gating). The remaining portion of redemption applications shall be considered submitted for the subsequent valuation day. Details must be disclosed in the fund regulations. FINMA approves the inclusion of gating in the fund regulations. 207
The audit company and FINMA must be informed immediately of any decision on deferral or gating as well as any lifting of such. Investors must also be notified in a suitable manner. 208
The fund regulations may provide for repayment to be deferred temporarily in the following exceptional cases:
The audit company and FINMA must be informed immediately of any decision to defer redemptions. The decision must also be communicated to the investors in a suitable manner.
FINMA may approve the segregation of individual illiquid investments of a collective investment scheme ( side pockets ) in exceptional cases at the justified request of the fund management company or the SICAV if this is in the interests of all investors and if the fund contract or the investment regulations so provide.
The fund management company or the SICAV must publish its decision on segregation in the media of publication following approval by FINMA.
Enforced redemption pursuant to Article 82 of the Act is permitted only in exceptional circumstances.
The reasons for enforced redemption must be set out in the fund regulations.
The fund management company and the SICAV shall prepare a single set of fund regulations for a collective investment scheme. Such regulations shall include the designation of the scheme and the additional designations of the individual sub- funds.
Where the fund management company or the SICAV has the right to create additional subfunds, or dissolve or merge existing subfunds, specific reference must be made thereto in the fund regulations.
The fund management company and the SICAV shall also set out in the fund regulations that:
The fees charged when investors convert from one subfund to another are cited explicitly in the fund regulations.
In relation to the merging of subfunds, Article 115 applies accordingly.
Investment funds or subfunds may be merged by the fund management company if:
... 212
FINMA may make the merging of investment funds and the transfer of assets of a SICAV dependent on additional conditions, especially in the case of real estate funds.
In the case of the merging of two investment funds, the investors of the fund being transferred receive an equivalent number of units in the acquiring fund. The fund being transferred is terminated without liquidation.
The fund contract governs the merging procedure. In particular, it contains provisions regarding:
FINMA may grant limited deferment of repayment if the merger is likely to take more than one day.
The fund management company shall notify FINMA that the merger has been completed.
... 213
In the case of the transfer of assets of a SICAV, as well as the division and the conversion of an open-ended collective investment scheme, Articles 114 and 115 apply accordingly.
The collective investment scheme shall be dissolved and may be liquidated immediately provided:
Where FINMA orders the dissolution of the collective investment scheme, such scheme shall be liquidated immediately.
Prior to the final payment, the fund management company or the SICAV shall obtain authorisation from FINMA.
The trading of units on the exchange ceases at the time of dissolution.
The termination of the custodian bank agreement between the SICAV and the custodian bank shall be notified to FINMA and the audit company immediately.
The LPCI may only manage its own investments. It is specifically prohibited from rendering services pursuant to Article 26 and 34 FinIA 216 t on behalf of third parties or taking up entrepreneurial activities for the pursuit of commercial purposes. 217
It invests in risk capital of companies and projects and can determine their strategic direction. It can also invest in instruments pursuant to Article 121.
To achieve this object, it may:
... 218
Where the company has a general partner, the general partner must have a minimum paid-up share capital of 100,000 Swiss francs. Where it has several general partners, they must together have a minimum paid-up share capital of 100,000 Swiss francs.
In relation to the general partners, the authorisation and reporting duties defined in Articles 14 paragraph 1 and 15 paragraph 1 apply accordingly.
The general partners may delegate investment decisions and other activities, provided this is in the interests of efficient management.
They shall exclusively commission persons who are properly qualified to execute such activities, and shall ensure the instruction, monitoring and control necessary with respect to implementation of the tasks assigned.
The persons holding executive powers with the general partners may participate in the company as limited partners if:
... 220
The company agreement regulates the details and must be published in an official language. FINMA may authorise a different language in individual cases. 221
Risk capital is generally used for the direct or indirect financing of companies and projects in the basic expectation of generating above-average added value, coupled with the above-average probability of making a loss.
Financing may take the following specific forms:
The following are specifically permitted:
The company agreement regulates the details.
Construction, real estate and infrastructure projects are permitted only if they are by persons that are neither directly nor indirectly related to:
The general partner, the persons responsible for the administration and the management and closely connected natural and legal persons, and the investors in an LPCI, may acquire real estate and infrastructure assets from that partnership or assign any such assets to it if:
The investment company with fixed capital may only manage its own assets. Its primary object is to generate income and/or capital gains, whereby it does not pursue any entrepreneurial activities in the true sense. It is specifically prohibited from rendering services pursuant to Articles 26 and 34 FinIA 227 on behalf of third parties. 228
It may delegate investment decisions as well as specific tasks, provided this is in the interests of efficient management.
Shares amounting to at least 500,000 Swiss francs must be fully paid up in cash at the time of formation.
The minimum investment amount must be maintained at all times.
The SICAF shall notify FINMA of any shortfall in the minimum investment amount immediately.
The governing bodies must at all times hold treasury shares as a percentage of the total assets of the SICAF as follows, subject to a maximum of 20 million Swiss francs:
The provisions concerning permitted investments for other funds apply accordingly.
FINMA may authorise other investments.
Article 39 applies accordingly.
Article 111 applies accordingly.
In the media of publication, the SICAF shall publish the significant amendments to the articles of association and the fund regulations resolved by the general meeting and approved by FINMA, indicating the locations where the full wording of the amendments may be obtained free of charge.
A collective investment scheme is only deemed to be a Limited Qualified Investor Fund (L-QIF) if it expressly waives the requirement to obtain authorisation and approval from FINMA.
An express waiver exists if the institution responsible for the management of the L-QIF submits the first notification to the Federal Department of Finance (FDF) of the assumption of management in accordance with Article 126 g paragraph 1 letter a of this Ordinance.
The L-QIF is subject to this Ordinance, unless otherwise specified herein.
It is subject to the provisions of the FINMA Collective Investment Schemes Ordinance of 27 August 2014 231 (CISO-FINMA) insofar as this Ordinance so provides.
It is subject by analogy to the following self-regulatory instruments issued by the industry organisation and recognised by FINMA as a minimum standard 232:
The change of status from a supervised collective investment scheme to an L-QIF requires prior approval and, if necessary, authorisation from FINMA.
FINMA shall approve the change of status and, where applicable, authorise it if:
FINMA may define the conditions for a change of status to an L-QIF in more detail.
In its decision to approve and, where applicable, authorise the change of status, it shall specify the date on which the collective investment scheme is released from supervision.
The fund management company, the board of directors of a SICAV and the general partners of an LPCI must notify FINMA immediately of the decision to change status to an L-QIF.
In the case of a collective investment scheme in the legal form of a contractual fund or SICAV, the decision to change status must be published in the media of publication. The publication must contain the following information in particular:
In the case of a collective investment scheme in the legal form of an LPCI, the general partners must inform the limited partners of the associated effects on the approval and authorisation status of the LPCI, in particular the release of the LPCI from FINMA supervision, before the resolution on the change of status is passed.
Restructuring of an L-QIF with or into supervised collective investment scheme is not permitted.
The following provisions are not applicable to L-QIFs:
The institution responsible for the administration of an L-QIF shall notify the FDF of the following, stating its own company name and the name or company name of the L-QIF:
When taking over the administration, it must also report the following in particular to the FDF for statistical purposes within the period specified in paragraph 1 letter a:
When it ceases to administer the L-QIF, it shall also notify the FDF of the date on which it ceases to administer the L-QIF for statistical purposes within the period specified in paragraph 1 letter b.
It shall also notify the FDF of the following for statistical purposes within 14 days in each case:
The FDF may make the data in accordance with paragraph 1, paragraph 2 letters b and e and paragraph 4 letters a and c publicly accessible in a directory.
The institution responsible for the administration of the L-QIF must periodically transmit the following L-QIF data in particular to the FDF or a third party commissioned by the FDF for statistical purposes:
The FDF shall issue technical directives on the form of the reports in accordance with this Article. In particular, it shall specify which data are to be provided in full or in part in electronic form.
The FDF or the commissioned third party may exchange the data collected in accordance with this Article with Swiss financial market supervisory authorities within the scope of their respective statutory duties.
The FDF or the commissioned third party may publish the data collected in accordance with this Article in aggregated form and forward it to other competent federal authorities, in particular the Federal Statistical Office, as well as to competent authorities of other countries and international organisations.
The institution responsible for the administration of a L-QIF (Art. 118g or 118 h CISA) is responsible for ensuring that the legal, contractual, statutory or regulatory provisions applicable to the L-QIF are complied with.
If a collective investment scheme does not comply or no longer complies with the definition of an L-QIF set out in Article 118a paragraph 1 letters a-c CISA, the institution must inform FINMA, the custodian bank and the audit firm immediately.
If the legal, contractual, statutory or regulatory provisions applicable to the L-QIF are otherwise not or no longer complied with, the institution must immediately inform the investors, the custodian bank and the audit firm and ensure that the proper situation is restored within a reasonable period of time. If this is not possible, it must dissolve the L-QIF.
Amendments to the fund contract of an L-QIF in the legal form of a contractual fund that are required by law, that do not affect the rights of investors or are of an exclusively formal nature are exempt from the publication requirement under Article 118 j paragraph 2 CISA.
The content of the investment regulations of an L-QIF in the legal form of a SICAV is governed by the provisions of the fund contract, unless the CISA or the articles of association provide otherwise. The investment regulations must be approved by the general meeting of shareholders.
The general meeting of the SICAV or the subfunds is responsible for amending the investment regulations, provided that the amendment:
If the general meeting of shareholders decides to amend the investment regulations, it must either publish the following information in the media of publication or notify the investors in writing:
Paragraphs 1–3 apply by analogy to the articles of association insofar as they govern the content of the investment regulations.
In the case of an L-QIF in the legal form of a contractual fund or SICAV, the fund management company or the SICAV may, subject to the consent of the custodian bank, create, cancel or merge unit classes, provided this is provided for in the fund contract or the articles of association.
In doing so, it shall address the following specific criteria: cost structure, reference currency, currency hedging, distribution or reinvestment of income, minimum investment or investor eligibility.
The details must be set out in the fund contract or the investment regulations. The risk that a class may be liable for another class must be specifically disclosed.
The fund management company or the SICAV shall announce the creation, dissolution or merging of unit classes in the media of publication. Only a merger is deemed to be an amendment to the fund contract or the investment regulations.
Article 112 paragraph 3 letters a-c applies accordingly.
An L-QIF in the legal form of a contractual fund or SICAV must have net assets of at least 5 million Swiss francs at the latest one year following its launch.
The fund management company may extend the deadline twice by six months if this is provided for in the fund contract or the investment regulations.
If the fund management company exercises its right to extend the deadline, it must inform the custodian bank and the audit company immediately and either publish the decision in the media of publication or notify the investors in writing.
The fund contract or the investment regulations of an L-QIF in the legal form of a contractual investment fund or SICAV whose value is difficult to ascertain, or which has limited marketability, may provide for notice to be served only on specific dates, subject to a minimum of every five years.
Furthermore, the fund contract or the investment regulations may permit a pro rata cutting off of redemption applications on reaching a specific percentage or threshold on a specific trading day in exceptional circumstances if this is in the interests of the remaining investors (gating). The remaining portion of redemption applications shall be considered submitted for the subsequent valuation day. Details must be disclosed in the fund contract or the investment regulations.
If the fund management company makes a decision on gating, it must inform the audit company immediately and either publish the decision in the media of publication or notify the investors in writing.
The fund management company must inform the audit firm immediately of the temporary deferral of payment in accordance with Article 81 paragraph 1 or 118 m CISA and either publish the decision in the media of publication or notify the investors in writing.
In the case of L-QIFs in the legal form of a contractual fund or SICAV, the risk notice in accordance with Article 118 n paragraph 2 CISA must take the form of a warning clause that briefly and concisely describes the main risks associated with the potential investments. The warning clause must be included on the first page of the fund contract or the investment regulations and in the advertising documents.
The fund contract or the investment regulations must also contain explanations of the special risks and, where applicable, the increased volatility of the L-QIF.
L-QIFs in the legal form of a contractual fund or SICAV may:
The investment restrictions shall be set out explicitly in the fund contract or the investment regulations.
The fund contract or the investment regulations must also describe the permitted investment techniques, such as securities lending, repurchase agreements, the use of derivatives, borrowing or transfer of ownership by way of security, short selling and the granting of loans. In particular, they must regulate the type and amount of permitted short sales. If securities lending or repurchase agreements are permitted, the fund contract or the investment regulations and the annual report must contain the information specified in Article 76 paragraphs 4 and 5.
Articles 1–55 CISO-FINMA 233 in the version of 1 January 2015 234 on securities lending, repurchase agreements, derivative financial instruments and collateral management apply by analogy, with the exception of the obligations to inform FINMA and to obtain FINMA approval.
Unless specified otherwise, the percentage restrictions given in Article 126 p relate to the fund assets at market values; they must be maintained at all times.
In the case of L-QIFs which include subfunds, the investment restrictions and techniques for each individual subfund apply.
An L-QIFs in the legal form of a contractual fund or SICAV must comply with the investment restrictions within two years of its launch. If this deadline cannot be met, the fund management company may extend it once, provided this is permitted by the fund contract of the investment regulations. If the fund management company exercises this right, it must inform the custodian bank and the audit company immediately and either publish the decision in the media of publication or notify the investors in writing.
If the limits are exceeded as a result of market changes, the investments must be restored to the permitted level within a reasonable period, taking due account of the investors' interests.
If the investment regulations are actively violated, in particular through purchases or sales, the investments must be immediately restored to the permitted level. If investors are not compensated for any loss incurred as a result of such an active investment violation, the investment violation must be reported to the audit company immediately and published in the media of publication as soon as possible or communicated to the investors in writing. The report and publication must include a specific description of the investment violation and of the loss incurred by the investors. All active investment violations must be reported in the annual report.
The fund contract of an L-QIF in the legal form of the contractual fund or the investment regulations of a SICAV must regulate the extent to which the L-QIF may make investments in other collective investment schemes (target funds). If this involves a significant portion of the fund assets, then:
An L-QIF feeder fund is an L-QIF that invests at least 85 per cent of the fund’s assets in units of the same L-QIF target fund (L-QIF master fund).
Master-feeder structures are permitted for L-QIFs, provided this is permitted by the fund contract or the investment regulations and both the master fund and the feeder fund are L-QIFs.
The investors in an L-QIF master fund are its L-QIF feeder funds. Other investors may be admitted provided that:
Articles 56–64 CISO-FINMA 235 in its version dated 1 January 2015 236 on master-feeder structures apply by analogy, with the exception of the obligations to inform FINMA and to obtain FINMA approval.
The permitted real estate investments of an L-QIF in the legal form of the contractual fund or a SICAV must be expressly described in the fund contract or the investment regulations.
The real estate and mortgage notes or other contractual charges on property must be entered in the land register in the name of the fund management company or the SICAV, noting the affiliation to the L-QIF. If the L-QIF has subfunds, it must be noted to which subfund the property, mortgage note or other contractual charges on property belongs.
The fund contract or the investment regulations must contain information on whether the L-QIF may acquire undeveloped land that is not connected to utilities and not suitable for immediate development and does not have a legally valid building permit for development. The fund contract or the investment regulations must describe the special risks associated with such investments.
If the fund management company has buildings constructed or carries out building renovations, it may credit the L-QIF's income statement for building land and buildings under construction with a building interest at the market rate for the period of preparation, construction or building renovation, provided that the costs do not exceed the estimated market value.
An L-QIF in the legal form of a contractual fund or SICAV may hold real estate in co-ownership. In the case of ordinary co-ownership, the fund contract or the investment regulations must specify whether:
In the case of co-ownership interests that correspond to a minority interest, the fund contract or the investment regulations must contain the following information:
The fund contract or the investment regulations must, where applicable, indicate the particular risks associated with any of the measures referred to in paragraph 1.
In relation to pledging land and ceding the rights of lien as collateral, the encumbrance of all properties of an L-QIF in the legal form of a contractual fund or SICAV may not exceed on average one half of the market value of all real estate assets.
The fund contract and investment regulations of L-QIF in the legal form of a contractual fund or SICAV with real estate investments must contain the following information on risk diversification in particular:
In the case of an L-QIF in the legal form of a contractual fund or SICAV with real estate investments, transactions with closely connected persons in accordance with Article 63 paragraphs 2 and 3 CISA are permitted if:
Following conclusion of the transaction, the fund management company must prepare a report containing the following:
As part of its audit of the fund management company, the audit company must confirm adherence to the special duty of loyalty in relation to real estate investments.
The approved transactions with closely connected persons must be mentioned in the annual report of the L-QIF.
In the case of properties where the fund management company, SICAV or persons closely connected thereto have construction projects carried out, no exemptions from the prohibition of transactions with closely connected persons are possible.
The term ‘closely connected persons’ is defined in Article 91 a .
The valuation experts in accordance with Article 118p paragraph 2 CISA must:
They must carry out the valuation with the diligence of a prudent and competent valuation expert.
The valuation of properties on acquisition or sale, the valuation of properties belonging to the L-QIF and the audit and valuation of construction projects are governed by Articles 92–94.
The company agreement of an L-QIF in the legal form of an LPCI must explicitly state the applicable investment restrictions and describe the permitted investment techniques.
Construction, real estate and infrastructure projects are permitted only if they are by persons that are neither directly nor indirectly connected with:
The general partner, the persons responsible for the administration and the management and closely connected natural and legal persons, and the investors in an LPCI, may acquire real estate and infrastructure assets from that partnership or assign any such assets to it if:
As part of its audit of the institution responsible for management, the audit firm must verify compliance with the special duty of loyalty in relation to real estate investments.
The requirements for valuation experts, the valuation of properties on acquisition or sale, the valuation of properties belonging to the L-QIF and the audit and valuation of construction projects are governed by Article 126 y .
Articles 79–105 and 108 CISO-FINMA 238 in the version dated 1 January 2021 239 apply by analogy to the accounting, valuation and reporting of an L-QIF, with the exception of the second sentence of Article 83 paragraph 1.
Insofar as the valuation is not governed by CISO-FINMA or the recognised self-regulation of the industry organisation, it must be carried out in accordance with recognised international standards. The standards applied must be described in detail in the fund contract, the investment regulations or the company agreement.
The fund contract or the investment regulations of an L-QIF in the legal form of the contractual fund or SICAV must specify when and in what form the issue and redemption prices and the net asset value are to be disclosed to investors. Disclosure must be made at least once a year.
If the net asset value is published, the words ‘excluding commissions’ must be added.
The L-QIF audits are divided into an audit of accounts and a supplementary audit.
The auditing of the L-QIF's accounts comprises the audit of the information in accordance with Articles 89 paragraph 1 letters a–h and 90 CISA.
The auditing of the accounts of the general partner of an L-QIF in the legal form of an LPCI is governed by Articles 728–731 a OR 240 .
The auditing of accounts must be carried out annually.
The additional audit of the L-QIF comprises the audit of compliance with the following regulations:
The additional audit must be carried out every two years.
In the first audit year after the launch of the L-QIF or after amendment of the fund documents, the additional audit shall also include an audit of compliance with the following regulations:
In the audit year in which the deadline for compliance with the investment restrictions under Article 126 q paragraph 3 must be met, the additional audit shall also include an audit of whether the deadline has been met.
Articles 5–8 of the Financial Market Auditing Ordinance of 5 November 2014 243 apply by analogy to the conduct of the additional audit.
The audit of other provisions of financial market law as part of the supervisory audit of the institution responsible for management in accordance with Article 112 paragraph 1 CISO-FINMA 244 in the version dated 1 January 2021 245 is reserved.
The audit company prepares:
In the case of an L-QIF, which include subfunds, individual reports must be submitted for each subfund.
The reports must be written in one of Switzerland’s official languages or in English.
The provisions of the Swiss Code of Obligations 246 on the ordinary audit apply by analogy to the reports on the auditing of accounts.
The audit company must prepare the summary report in good time before publication of the annual report. It must be signed by the responsible lead auditor and another authorised signatory from the audit company.
The summary report must comment on compliance with the legal, contractual, statutory and regulatory provisions on the annual accounts and on the audit of the information pursuant to Article 89 paragraph 1 letter a–h CISA. In the case of L-QIFs with real estate investments, it must also comment on the information pursuant to Article 90 CISA.
In the case of an L-QIF in the legal form of an SICAV, the summary report may also include the auditor's report in accordance with Article 728 b CO 247 .
The standard confirmation of the industry organisation for auditing declared generally binding by FINMA also applies to the L-QIF.
The audit report on the supplementary audit must present the results of the audit comprehensively, clearly and objectively. The lead auditor and another auditor with authority to sign shall confirm this with their signatures.
The audit report must be brought to the attention of the body responsible for the governance, supervision and control of the institution responsible for the management of the L-QIF and the body responsible for the governance, supervision and control of the L‑QIF. The audit report shall be discussed at a meeting of these bodies and the discussion shall be recorded in the minutes.
If the audit firm identifies material deficiencies in the course of its audit activities, it must include these as reservations in the audit report on the supervisory audit of the institution responsible for the management of the L-QIF.
The violation of a provision pursuant to Article 118 a paragraph 1 CISA is always considered a material deficiency.
If the designation of a foreign collective investment scheme provides grounds or might provide grounds for confusion or deception, FINMA may require a supplementary explanation.
Advertising for foreign collective investment schemes triggers the duties in accordance with Article 120 paragraphs 1 and 4 CISA.
Units or unit classes of a foreign open-ended collective investment scheme that are structured as ETFs under foreign law and are offered to non-qualified investors in Switzerland must be permanently listed on a Swiss stock exchange.
A fund management company of a foreign collective investment scheme or a foreign fund management company whose collective investment scheme is approved to be offered to non-qualified investors in Switzerland shall provide evidence that it:
The custodian bank shall provide evidence that it has concluded a paying agent agreement in writing or in another form demonstrable via text.
In relation to the offer of foreign collective investment schemes in Switzerland, the representative agreement specifically regulates:
FINMA shall publish a list of countries with which it has concluded an agreement on cooperation and the exchange of information pursuant to Article 120 paragraph 2 letter e of the Act.
The representative of a foreign collective investment shall have an appropriate organisational structure for the fulfilment of its duties pursuant to Article 124 CISA.
FINMA shall regulate the details of the organisation and duties of the representative of foreign collective investment schemes. 253
FINMA may in individual cases specify a simplified, fast-track approval procedure for foreign collective investment schemes provided such investments have already been approved by a foreign supervisory authority, such arrangement being reciprocal.
Foreign collective investment schemes which are offered to qualified investors in accordance with Article 5 paragraph 1 of the Financial Services Act of 15 June 2018 256 (FinSA) within the scope of a permanent investment advice relationship within the meaning of Article 3 letter c item 4 FinSA are not required to meet the conditions of Article 120 paragraph 2 letter d CISA.
Employee share participation schemes are employee participation schemes in accordance with Article 5 FinIO 258 .
The approval for foreign collective investment schemes pursuant to Articles 15 and 120 CISA lapses if the supervisory authority in the country of domicile of the collective investment scheme withdraws its approval.
The representative of foreign collective investment schemes must possess minimum capital of 100 000 Swiss francs. This must be paid up in full and maintained at all times.
FINMA may permit partnerships to provide, instead of minimum capital, collateral in the form of a bank guarantee or a cash deposit in a blocked account with a bank, said collateral being equivalent to the minimum capital.
Where there are legitimate grounds for so doing, FINMA may stipulate a different minimum amount.
In all other respects, Article 20 applies accordingly.
The representative shall ensure that investors can obtain from it the principal documents of the foreign collective investment scheme.
The representative shall conclude professional indemnity insurance appropriate to its business activities of at least 1 million Swiss francs, less the minimum capital or effective collateral furnished in accordance with Article 131.
The representative of a foreign collective investment scheme shall publish the documents pursuant to Articles 13 a and 15 paragraph 3, as well as the annual and semi-annual report, in an official language or in English. FINMA may authorise publication in another language, provided publication is directed only towards a specific investor eligibility. 262
The following must be indicated in the publications and marketing material:
If in place of the key information document an equivalent document in accordance with Annex 10 of the Financial Services Ordinance of 6 November 2019 264 is used, the information in accordance with paragraph 2 may be contained in an annex to the key information document. 265
The representative of a foreign collective investment scheme shall submit the annual and semi-annual reports to FINMA immediately, notify it of amendments to such documents pursuant to Article 13 a immediately and publish such amendments in the media of publication. Articles 39 paragraph 1 and 41 paragraph 1, second sentence, apply accordingly. 266
It shall publish the net asset values of units at regular intervals.
The publication and reporting regulations do not apply to foreign collective in- vestment schemes that are exclusively offered to qualified investors. 267
The audit company for the custodian bank shall verify whether the custodian bank is complying with the supervision and contractual provisions.
If the audit company for the custodian bank identifies an infringement of supervision or contractual provisions or other irregularities, it shall inform FINMA and the audit company for the fund management company or for the investment company with variable capital (SICAV).
The audit company for the custodian bank shall specify in a separate audit report whether the custodian bank is complying with the supervision and the contractual provisions.
It must also include any reservation in the audit report under Article 27 paragraph 1 of the Financial Market Supervision Act of 22 June 2007 272 on the custodian bank.
It shall submit the audit report under paragraph 1 to the following recipients:
The audit company for the fund management company or the SICAV shall take account of the results of the report on the audit of the custodian bank in their own audits.
It may request additional information from the audit company for the custodian bank that it requires to carry out its tasks.
When auditing the accounts of collective investment schemes, the information under Articles 89 paragraph 1 letters a–h and 90 CISA shall be audited.
In relation to the auditing of accounts of persons named in Article 126 paragraph 1 CISA, of the investment funds managed and of any real estate company belonging to the real estate funds or to the real estate investment companies, FINMA may regulate the details relating to form, content, periodicity, time limits and recipients of reports as well as the conduct of the audit.
Where the continuation of the investment fund is in the interests of the investors and a suitable new fund management company or custodian bank can be found, FINMA may order the transfer of the fund contract thereto including rights and obligations.
Where the new fund management company enters into the fund contract, the liabilities and ownership of the assets and rights belonging to the investment fund must by law be passed to the new fund management company.
Where the continuation of the SICAV is in the interests of the investors and a suitable new SICAV can be found, FINMA may order the transfer of the assets thereto.
FINMA may determine the form for submission, specifically for the following documents:
It may designate a third party as the recipient of the submission.
For collective investment schemes offered to retail clients prior to the entry into force of the amendment of 6 November 2019, simplified prospectuses and key investor information may continue to be used until 31 December 2022 in accordance with the requirements of Annexes 2 in the version of 1 March 2013 280 and 3 in the version of 15 July 2011 281 . 282
If key investor information pursuant to Annex 3 in the version of 15 July 2011 is used, including the appropriately revised presentation of the collective investment scheme’s past performance in the period to 31 December, it must be published by the fund management company and SICAV within the first 35 working days of the following year.
Within two years of the entry into force of the amendment of 6 November 2019, fund management companies and SICAVs must submit the revised fund contracts and investment regulations to FINMA for approval. In special cases, FINMA may extend this time limit. 283
Exceptions which FINMA has granted on a case-by-case basis to fund management companies of investment funds for institutional investors with professional treasury operations in accordance with Article 2 paragraph 2 of the Investment Fund Ordinance (Art. 10 para. 5 CISA) continue to apply.
For structured products offered to retail clients prior to entry into force of the amendment of 6 November 2019, simplified prospectuses may continue to be used until 31 December 2022 in accordance with the requirements of Annex 4 in the version of 1 March 2013 284 . 285
The duty to inform investors pursuant to Article 6 a must be satisfied at the time of the first client contact, but in any event within two years of this Ordinance coming into force.
The fund documents of existing collective investment schemes must be adapted to the requirements of Articles 76 paragraph 4 and 106 paragraphs 4 and 5 within two years of the amendment of 31 January 2024 coming into force. The deadline is deemed to have been met on submission of the amended documents to the competent authority.
Article 76 paragraph 5 applies to existing collective investment schemes for the first time for the financial year that begins two years after the new act comes into force.
The requirements of Article 108 a must be met in relation to existing collective investment schemes within two years of the amendment of 31 January 2024 coming into force.
This Ordinance comes into force on 1 January 2007.