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Revision of collective investment scheme rules

Andreas Moll

The Swiss Government, the Federal Council, intends to amend the Swiss Collective Investment Schemes Act (CISA). It announced in January 2012 that it will draw up a dispatch of the amended CISA to be ready by spring 2012, taking into consideration the statements submitted by the invited parties and organisations in the course of the consultation proceedings.

Having come into force in 2007, the CISA no longer conforms to the current requirements with respect to investor protection and international competitiveness. According to the Federal Council, the financial crisis had demonstrated the CISA's shortcomings. The main reason for the speedy revision of the CISA, however, is the coming into effect of the EU Directive on Alternative Investment Fund Managers of July 22 2011 (AIFM Directive) which has to be implemented by the member states of the European Union by the middle of 2013.

After implementation of the AIFM Directive, only asset managers in non-member states which are adequately supervised will be allowed to market collective investment schemes governed by the AIFM Directive. The Federal Council fears for the reputation of the Swiss financial centre if the CISA is not amended to provide for adequate supervision: Swiss asset managers would move to EU member states and, at the same time, foreign asset managers, trying to evade the regulations of the AIFM Directive in Europe, would move to Switzerland.

Consequently, the most important change in the amended CISA, as published for the purposes of the consultation proceedings, was the extension of the CISA's scope: all asset managers, marketing Swiss or foreign collective investment schemes in or from Switzerland, will be subject to supervision.

In their consultation statements concerning the scope of the amended CISA, most parties and organisations basically agreed with the intention of the Federal Council to provide for adequate supervision in accordance with the AIFM Directive.

The fact that the draft of the amended CISA exceeds the requirements of the AIFM Directive with respect to its scope was strongly criticised, however. Several consulted parties have demanded that a catalogue of exceptions be included, similarly to the AIFM Directive, to exclude specific categories of asset managers. Some suggested that asset managers of non-EU funds which are not marketed in the EU or Switzerland should generally be excluded from the scope of the CISA.

The dispatch of the amended CISA has not yet been published by the Federal Council. While it can be expected with certainty that the CISA will provide for adequate supervision in line with the AIFM Directive's requirements, it is up to the Swiss Parliament whether even stricter regulations for marketing collective investment schemes in Switzerland will come into force.

Andreas Moll

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