Custodian banks take on an important function in relation to collective investment schemes managed by fund management companies, SICAVs and SICAFs. Unlike depositories and paying agents, custodian banks must be authorised by FINMA.
To be eligible for a licence from FINMA, a custodian bank must meet at least the following requirements (under Art. 72 CISA and Arts. 45 and 102a CISO):
- It must be a bank in accordance with the Banking Act.
- It must have an organisation that is appropriate to its role as a custodian bank of collective investment schemes.
Those responsible for managing the bank and those entrusted with acting as custodians must be able to assure proper business conduct, enjoy a good reputation and hold appropriate professional qualifications.
- It must have at least three full-time equivalent positions with signatory powers for its activities as a custodian bank.
- Those responsible for managing the fund management company must be independent of the custodian bank, and vice versa.
Role of a custodian bank
The role of a custodian bank includes holding fund assets on deposit, issuing and redeeming units, and handling payments processing. A custodian bank can delegate the safe keeping of fund assets to third-party or collective depositories in Switzerland or abroad where this is appropriate. Investors must be informed in the fund prospectus of the risks associated with this kind of delegation (Art. 73 CISA).
Custodian banks must also ensure that the fund management company or SICAV complies with the law and the fund regulations. It verifies that:
- calculation of the net asset value and issue/redemption prices complies with the law and the fund regulations;
- investment decisions comply with the law and the fund regulations;
- profits are used in accordance with the fund regulations.
Changes in circumstances
Custodian banks must inform FINMA immediately if there are any personnel changes among those responsible for managing the (custodian) bank (Art. 16 CISA and Art. 15 para. 2 CISO).
Cessation of an activity for which authorisation is required
Any intention to cease the authorised activity requires prior approval from FINMA (Art. 16 CISA).
Information and templates
The following documents can be used when applying for authorisation, making changes requiring authorisation and/or switching custodian banc.