February 22, 2024
Funds

Wealth Sector Eyes New Swiss Qualified Investor Funds Regime


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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