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> Supervision of collective investment schemes  
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Supervision of collective investment schemes

The Federal Act on Collective Investment Schemes (Collective Investment Schemes Act; CISA) (in German or in French) and the Collective Investment Schemes Ordinance (CISO) (in German or in French) have been in force since 1st January 2007. These two pieces of legislation are supplemented by the SFBC Ordinance on Collective Investment Schemes (CISO-SFBC) (in German or in French), which came into force on 15 February 2007. The latter supersede the Federal Act on Investment Funds (IFA) and its associated Ordinance (IFO), which were repealed on 1st January 2007, while the Investment Funds Ordinance of the SFBC (IFO-SFBC) was repealed on 15th February 2007. The legislation is supplemented by SFBC Circulars, while self-regulatory rules of industry organisations may be recognised by the SFBC as a minimum standard.

The entry into force of the CISA has restored the eurocompatibility of the applicable law in this area. It has also extended the scope of the legislation to collective investment schemes in the form of corporations (investment company with variable capital [SICAV], investment company with fixed capital [SICAF] and limited partnership for collective investments), and achieved a general liberalisation in this area. Additionally, the protection accorded to investors – a consistent aim of the Act (Art. 1 CISA) – now reflects their differing needs and status as it distinguishes between "ordinary" and "qualified" investors. The Act is also designed to reinforce their rights and further enhance transparency (Memorandum on the Federal Act on Collective Investment Schemes dated 23rd September 2005 (in German)).

Art. 2 para. 2 of the CISA includes a non-exhaustive list of collective investments for which the Act is not applicable. In addition and provided that the requisite conditions are met, investment companies in the form of public limited companies (Art. 2 para. 3 CISA) which are listed on a Swiss stock exchange or which shareholders are only qualified investors, in-house funds set up on a contractual basis by a bank or a securities dealer (Art. 4 CISA) and structured products (Art. 5 CISA) are also exempted under the Act.

In accordance with Art. 132 CISA, the SFBC grants the authorisations and approvals required under the Act and supervises compliance with the legal, contractual, statutory and regulatory provisions. The CISA and its associated ordinances set forth the conditions for granting an authorisation. In particular, they govern the investment principles of the various forms of collective investment and specify the minimum content of the documents that require approval.

The CISA distinguishes between the concepts of authorisation and approval. Institutions that are subject to supervision require an authorisation (CISA Art. 13), while the documents of collective investment schemes require an approval.

Subject to the exemptions set forth in Art. 8 CISO, any individual or entity that manages or acts as a custodian for collective investments, requires the authorisation of the Swiss Federal Banking Commission. This includes:
• 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);
• asset managers of Swiss collective investment schemes (Art. 18 CISA);
• distributors (Art. 19 CISA);
• representatives of foreign collective investment schemes (Art. 119 ff. CISA).

Asset managers of foreign collective investment schemes may apply for an authorisation from the supervisory authority (Art. 13 para. 4 CISA).

The criteria for an authorisation for distributors and representatives of foreign collective investment schemes is still triggered by public advertising.

Authorisations are granted to all the institutions above if both the general and the specific conditions are fulfilled (Art. 14 CISA).

The following documents for collective investment schemes require the approval of the SFBC:
• the collective investment contract of investment funds (Art. 25);
• the Articles of Incorporation and investment regulations of SICAVs;
• the partnership agreement of limited partnerships for collective investments;
• the Articles of Incorporation and investment regulations of SICAFs;
• the corresponding documents of foreign collective investment schemes.
Approval is granted when the product complies with the applicable legal requirements.

SICAVs, SICAFs and limited partnerships for collective investments require both an authorisation as an institution and an approval for their product or products.

The dual supervisory system requires fund management companies (both for themselves and for the funds they manage), SICAVs, SICAFs, limited partnerships for collective investmenst, asset managers of collective investment schemes and representatives of foreign collective investment schemes to designate an auditor recognised by the Banking Commission (Art. 126 CISA). Distributors are not obliged to comply with this requirement, while custodian banks already have a recognised auditor. The auditor examines whether the authorisation holder complies with the legal, statutory and regulatory requirements. Its findings are set out in a report which is delivered to both the authorisation holder and the supervisory authority (Art. 128 CISA).

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Further information
Authorised institutions
FAQ Authorisation requirements