Pursuant to Article 7, Paragraph 4, of the Federal Investment Fund Act (IFA), the name of a Swiss investment fund must not give rise to deception or confusion. A foreign investment fund will also be granted a distribution licence only if these requirements are observed (Article 45, Paragraph 4, IFA). The appendix to the Guidelines for Applications for the Approval of Fund Regulations issued by the Swiss Federal Banking Commission on December 18 2001, therefore, are also applicable to foreign investment funds.
The basic rule mandates that at least two-thirds of the total fund assets must be invested on a long-term basis in a manner such that the investments correspond with the fund name. In addition, various areas are regulated in terms of the given name. These areas will be described in abridged fashion below, by way of example. The complete appendix can be viewed at http://www.ebk.admin.ch/d/publik/wegleit/dbew.pdf.
If a specific investment category represents part of the fund name, various restrictions on the investment policy must be complied with. If a currency is included in the name, at least two-thirds of the investments must be denominated in this currency. Base currencies may constitute part of the name, but certain rules must be observed as well. The term "euro" is reserved for the standard currency of the EU and may not be used within the meaning of a geographical designation for Europe. If geographical, industry or sector designations constitute part of the name, some quotas concerning the engagement in that territory, sector or industry must be adhered to. An umbrella fund must basically make investments that correspond with its name. Furthermore, there are rules concerning the use of terms, for example, "income", "yield", "balanced", "growth", "small cap", "mid cap", "large cap", "high-yield", "short term", "medium term" and "index".
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