Portfolio managers and trustees

A person eligible to accept assets on a commercial basis in the name of and on behalf of clients or who manages the assets of collective investment schemes or occupational pension funds below the defined thresholds must be licensed by FINMA as a portfolio manager. A person who on a commercial basis manages or disposes of a separate fund for the benefit of the beneficiary or for a specified purpose based on the instrument creating a trust must be licensed by FINMA as a trustee.

Licensing requirements

Persons applying to FINMA for a portfolio manager’s or trustee’s licence must meet a number of licensing conditions. They are stipulated in the Financial Institutions Act (FinIA), Financial Institutions Ordinance (FinIO) and the FINMA Financial Institutions Ordinance (FinIO-FINMA). As a basic requirement, a portfolio manager must manage at least one portfolio on a commercial basis and a trustee at least one separate fund (trust within the meaning of the Hague Convention on the Law Applicable to Trusts and on Their Recognition) on a commercial basis including responsibility for value preservation or use for a specific purpose.

 

In addition, the portfolio manager and trustee must meet a number of personal, financial and organisational requirements. Of particular importance is the requirement that the portfolio manager and trustee provide proof that they are domiciled in Switzerland, are suitably organised and have adequate financial guarantees. Moreover, those responsible for the oversight and management of the company must be able to provide assurance of impeccable business conduct, enjoy a good reputation and hold the required professional qualifications.

Ongoing supervision

A supervisory organisation (SO) is responsible for ensuring compliance by portfolio managers and trustees with licensing requirements. The SO is licensed and supervised by FINMA. Portfolio managers or trustees within domestic group companies are exempt from this rule, as they can be exclusively supervised by FINMA within its group supervision role once they have obtained their licence.

Change in circumstances

The licensing requirements must be complied with at all times. Licensed portfolio managers and trustees must report any change in circumstances that affects their FINMA licence to the supervisory organisation, which forwards the information to FINMA periodically. Prior approval from FINMA is required for material changes.

 

The portfolio manager or trustee seeking such permission must specify the nature of the changes involved, describe the changes and the reasons for them, and submit the relevant documents.

Cessation of the activity requiring a licence

If a portfolio manager or trustee wishes to cease operations, it requires prior approval from FINMA. The supervisory organisation or the regulatory audit firm will also be asked to give its opinion of the intended action.

Submitting applications

The licensing and licensing amendment process is processed electronically via the EHP survey and application platform. All forms and information for submitting or changing an application are stored there. Confirmation of affiliation to an SO can be uploaded as an appendix to the licensing application. Prior to first use, users must register on the EHP (further information on the licensing process).

 

The application form must be submitted in an official language of the Swiss Confederation and signed by the portfolio manager or trustee. FINMA will process the application once it has been formally submitted in full. This does not preclude the possibility of the portfolio manager or trustee subsequently adding further information or of FINMA requesting such information.