Limited partnerships for collective investment

Limited partnerships (LPs) for collective investment must be authorised by FINMA as institutions. Their constituting documents, i.e. the partnership agreement, must also be approved by FINMA.

A limited partnership for collective investment (LP) is a company whose sole object is collective investment. At least one member (the general partner) bears unlimited liability, while the other members (limited partners) are liable only up to a specified amount (the total limited partner’s contribution) (Art. 98 para. 1 CISA). Unless the CISA provides otherwise, the provisions of the Swiss Code of Obligations apply in relation to limited partnerships. 

Authorisation and approval requirements

An LP must be authorised as an institution by FINMA before it can begin operations. The constituting document (partnership agreement) also requires approval. The general licensing and approval requirements set out in CISA apply, but there are other specific requirements which must be met. The most important of these are:

  • A general partner must be constituted as a limited company with its registered office in Switzerland and must act solely for one LP.
  • General partners must have paid-in capital of at least CHF 100,000.
  • Limited partners must be qualified investors as defined in Article 10 para. 3 and para. 3bis CISA.
  • The partnership exists as soon as it appears in the Commercial Register.
  • The partnership’s name must contain a description of its legal form or the abbreviation "LP".

Since the institution and the product are inextricably linked, the partnership agreement must contain provisions for both. It must be drawn up in writing (Art. 102 para. 2 CISA) and at least contain provisions relating to the points set out in Article 102 para. 1 CISA (company name and its registered office; its purpose; the company name and registered office of the general partners; total limited partner's contributions; the duration; the entry and exit conditions for limited partners; the maintenance of a register of limited partners; the investments, investment policy, investment restrictions, risk diversification, risks associated with investment, investment techniques, delegation of management and representative duties , and involvement of a depository and a paying agent).

Prospectus

The partnership agreement must be supplemented by a prospectus which does not have to be approved by FINMA, but must be consistent with the statutory provisions. The prospectus specifically sets out the information contained in the partnership agreement regarding the investments, investment policy, investment restrictions, risk diversification, risks associated with investment, and investment techniques (Art. 102 para. 3 CISA). The partnership agreement and prospectus must be submitted along with the application. 

Changes in circumstances

Advance approval must be obtained from FINMA for all product and licence-related changes to the basis on which authorisation was originally granted (Art. 16 CISA and Art. 14 f. CISO), with the exception of a change to the amount of the total limited partner’s contribution (Art. 14 para. 2 let. b. CISO) or to the limited partners (Art. 15 para. 1 let. c CISO). An application to this effect must be submitted to FINMA.

Information and templates

The following documents are available: