Fund Management

Wealth Sector Eyes New Swiss Qualified Investor Funds Regime

Tom Burroughes Group Editor London 12 February 2024

Wealth Sector Eyes New Swiss Qualified Investor Funds Regime

A new funds structure in Switzerland, open to qualified investors only, is designed to sharpen the competitiveness of the country as a funds jurisdiction. It is, in some respects, similar to the system operating in Luxembourg.

New Swiss rules for collective investment schemes take effect from the start of March, paving the way for Limited Qualified Investor Funds (L-QIFs), designed to make the Alpine state a more attractive fund management location.

As announced by the Federal Council at the end of January, the government agreed to put the revised Collective Investment Schemes Act (CISA) and the amended Collective Investment Schemes Ordinance (CISO) into force, with effect from 1 March. The Federal Assembly agreed in December 2021 to amend legislation and introduce the L-QIF category.

The new category isn’t subject to the licensing and approval requirements of the Swiss Financial Market Supervisory Authority. L-QIFs are available only to qualified investors and must be managed by entities supervised by FINMA.

“The L-QIF is inspired by the success and experiences of non-Swiss investment funds, such as the Luxembourg Reserved Alternative Investment Funds (RAIFs),” Lenz & Staehelin, the Swiss law firm, said in a recent note. “It is intended to meet the needs of the Swiss institutional investors, which commonly use collective investment schemes to pool their investments. The L-QIF may also suit the needs of Swiss banks and fund managers to tailor investment funds to the specific needs of high net worth individuals.”

Altenburger, the Swiss law firm, said in a commentary: "This unregulated newcomer will increase the attractiveness of Switzerland as a fund jurisdiction and represents an important step forward for Switzerland to become a leading asset management centre. For qualified investors, it is an indigenous alternative to equivalent foreign products, such as the Luxembourg Reserved Alternative Investment Fund (`RAIFs'). It should also help to promote innovation and enhance the attractiveness of the Swiss investment fund market."

"The L-QIF is not a new form of collective investment in legal terms and can be set up in the existing form of open-end structures such as a Swiss contractual fund or a SICAV, or as a closed-end structure, namely the Swiss LP (Société en commandite de placements collectifs). Only qualified investors within the meaning of CISA will be eligible to invest in an L-QIF," Alternburger said.

The move comes as Switzerland continues to bed down its new regulatory regime for external asset managers and trustees. Rules took effect at the start of 2023. 

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