SICAVs: investment companies with variable capital

Investment companies with variable capital must be authorised by FINMA as institutions. FINMA must also approve each SICAV's constituting documents. If the SICAV is an umbrella fund consisting of sub-funds, each sub-fund must be approved separately.

A SICAV is a company whose capital and number of shares are not specified in advance and whose capital is divided into company and investor shares; for whose liabilities only the company's assets are liable; and whose sole object is collective capital in-vestment (Art. 36 CISA). SICAVs are established under the provisions of the Swiss Code of Obligations applicable to the founding of a limited company but are exempt from the provisions governing non-cash contributions, non-cash acquisi-tions and special privileges (Art. 37 CISA).

Authorisation and approval requirements

A SICAV must be authorised by FINMA before it can begin operations. In addition, it must obtain approval for its constituting documents (i.e. its articles of association and investment regulations).

If the SICAV is an umbrella fund consisting of sub-funds, each sub-fund requires separate approval (Art. 15 para. 2 CISA). FINMA's approval must also be obtained before any new sub-funds are created within an existing SICAV.

The following are specific authorisation and approval requirements for SICAVs:

  • SICAVs must have assets of at least CHF 5m.
  • The company's name must contain a description of its legal form or the abbreviation "SICAV".
  • The ratio of company shareholder deposits to total assets must be appropriate.
  • Company and investor shares which do not have a nominal value and are freely transferable must be fully paid up in cash.
  • Investment regulations must be defined.
  • A custodian bank must be designated.
  • The SICAV must choose to be either self-managed (i.e. it handles its own administration and may delegate portfolio management activities as set out in Art. 51 para. 1 CISO) or externally managed (i.e. it delegates both administration and portfolio management activities as set out in Art. 51 para. 2 CISO).
  • Its sole object is to manage its funds/sub-funds.
  • It is prohibited from providing services to third parties in accordance with Article 29 CISA.
  • It must hold a defined quantity of equity capital.

Provisions relating to the institution and the product

Since the institution and the product are inextricably linked, the articles of association must contain provisions for both. SICAVs must define investment regulations whose contents are based on the provisions of the fund contract, unless CISA or the articles of association provide otherwise (Art. 62b CISO). The investment regulations specify the investments, investment policy, investment restrictions, risk diversification and the risks associated with the investments.

Self-managed and externally managed SICAVs

It is important to distinguish between self-managed SICAVs and externally managed SICAVs. The latter may only delegate their administration to an authorised fund manager (Art. 51 para. 2 CISO). Self-managed SICAVs are permitted to delegate their portfolio management activities to an asset manager of collective investment schemes who is subject to recognised supervision (Art. 51 para. 1 CISO). Unless stated otherwise, the application processes for both types of SICAV are identical.

Changes in circumstances

Advance approval must be obtained from FINMA for all product-related changes which entail a change in the investment regulations. If there is any alteration to the basis on which authorisation was originally granted, permission must be obtained from FINMA before operations can be resumed. An application to this effect must be submitted to FINMA.

Information and templates

The following documents are available: