The Federal Act on Collective Investment Schemes (Collective Investment Schemes Act; CISA) and the Federal Ordinance on Collective Investment Schemes (Investment Schemes Ordinance, CISO) have entered into force on 1 January 2007. These two pieces of legislation are supplemented by the FINMA Ordinance on Collective Investment Schemes (CISO-FINMA), which came into force on 15 February 2007. The legislation is further supplemented by FINMA circulars, while self-regulatory rules adopted by industry organisations may be recognised by FINMA as minimum standards.
The entry into force of CISA has restored the compatibility of the applicable legislation to the European level in this sector. It has also extended the scope of the legislation to collective investment schemes in corporate forms (investment companies with variable capital [SICAVs], investment companies with fixed capital [SICAFs] and limited partnerships for collective investments) and achieved a general liberalisation in this area. Additionally, the protection accorded to investors – a consistent goal of the Act (Article 1 CISA) – now reflects their differing needs in that it distinguishes between "ordinary" and "qualified" investors. The Act is also designed to improve their rights and further enhance transparency (Dispatch on the Federal Act on Collective Investment Schemes of 23 September 2005).
Article 2, paragraph 2 CISA contains a non-exhaustive list of collective investment schemes which are not governed by the Act. In addition and provided the requirements foreseen are met, investment companies in the form of public limited companies (Art. 2 para. 3 CISA) that are listed on a Swiss stock exchange or are directed to qualified investors only, in-house funds set up on a contractual basis by a bank or securities dealer (Art. 4 CISA) and structured products (Art. 5 CISA) do not fall under the scope of the Act.
In accordance with Article 132 CISA, FINMA grants the authorisations and approvals required under the Act and monitors compliance with legislative, contractual, statutory and regulatory provisions. CISA and its two associated ordinances set out the requirements for granting authorisations and approvals. In particular, they govern the investment principles of the various forms of collective investment schemes and stipulate the minimum content of the documents that require approval.
CISA distinguishes between authorisation and approval. Institutions that are subject to supervision require an authorisation (Art. 13 CISA), while the documents of collective investment schemes that are subject to supervision require an approval (Art. 15 CISA).
Any person or institution who manages or acts as custodian for collective investment schemes requires an authorisation from FINMA. The following institutions are supervised by the Collective Investment Schemes and Distribution Department:
- fund management companies (Art. 28 ff. CISA);
- SICAVs (Art. 36 ff. CISA);
- limited partnerships for collective investments (Art. 98 ff. CISA);
- SICAFs (Art. 110 ff. CISA);
- custodian banks (Art. 72 ff. CISA);
- distributors (Art. 19 CISA);
- representatives of foreign collective investment schemes (Art. 123 ff. CISA).
Authorisations are granted to the institutions listed above if both the general and the institution’s specific requirements are fulfilled (Art. 14 CISA).
The following documents for collective investment schemes require FINMA’s approval (Art. 15 CISA):
- collective investment agreements of investment funds;
- the articles of association and investment regulations of SICAVs;
- partnership agreements of limited partnerships for collective investments;
- the articles of association and investment regulations of SICAFs;
- the corresponding documents of foreign collective investment schemes.
Approval is granted as soon as the product complies with the applicable legislative requirements. The requirements set out in Article 120, paragraph 2 are applicable to foreign collective investment schemes.
Because of their dual nature, SICAVs, SICAFs and limited partnerships for collective investments logically require both an authorisation as an institution and an approval as a product.
Finally, the Collective Investment Schemes and Distribution Department is responsible for the supervision of insurance intermediaries as prescribed in the Federal Act on the Supervision of Insurance Companies. Insurance intermediaries are persons who offer and conclude insurance contracts for insurance companies or other persons. Apart from the information requirements, the central register is a key element of the applicable regulation. Registration in the register is mandatory for independent insurance intermediaries (agents and brokers), i.e. for both legal entities and individuals.