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Eric Favre
As modifications of the CISA have just been implemented on 1 January 2020 with the entry into force of two new pieces of legislation, the Financial Services Act and the Financial Institutions Act, we take this opportunity to highlight an upcoming change to CISA (no set date yet) that may be of interest to you.
On 26 June 2019, the Swiss Federal Council has opened a consultation process to modify the CISA to add a new type of collective investment scheme, the Limited Qualified Investor Fund (L-QIF). No date or timing of entry into force of this modification has been announced yet.
The salient features of the L-QIF are the following:
- The idea is to have a new type of collective investment scheme that caters to the needs of sophisticated investors,
- Hence, the L-QIF shall only be open/available to qualified investors as defined by CISA (such as supervised financial intermediaries, insurance companies, entities with professional treasury management, high net worth individuals and personal holding companies requiring to be considered qualified investors),
- Importantly, L-QIFs shall not need to be authorized or supervised by FINMA (or any other supervisory authority),
- The L-QIF may be a contractual investment fund, a SICAV, SICAF or Société en commandite de placements collectifs,
- As opposed to the L-QIF itself, as per Swiss law, the asset manager of a L-QIF in contractual form shall as a rule be authorized by FINMA if it is Swiss or subject to an appropriate state supervision, if it is foreign,
- Furthermore, for L-QIFs in corporate forms, asset management shall be made by a fund management company (so-called “Fondsleitung”) which must per se be authorized by FINMA,
- Logically changes in the L-QIFs are not subject to FINMA’s approval (as L-QIFs would not be supervised) but to adequate publication,
- L-QIFs should be exempt of the obligation to issue a prospectus under the Swiss Financial Services Act,
- From an anti-money laundering perspective, L-QIFs in corporate form shall not be subject (directly) to the Swiss Anti- Money Laundering Act, provided their management company guarantees compliance with the Swiss AMLA.
Please note that the consultation process under Swiss law for the above modification of CISA has ended on 17 October 2019. Hence, further modifications of the draft law and as a rule to the characteristics of the L-QIFs may occur.
Such form of collective investment schemes, very lightly regulated and agile, may be of interest if, in your business endeavors, you need and intend to have an investment vehicle that is flexible and only open to sophisticated (i.e. qualified) investors.
We are available for any questions regarding the above (CV Eric Favre).
