On November 1 1997, the Investment Fund Ordinance was amended to include an Institutional Investor's Exemption for foreign investment funds. The amendment states, provided there is no public solicitation, non-registered foreign investment funds may be offered and sold in Switzerland to institutional investors with professional treasury, such as banks, insurance companies and pension funds. The limitation to investors with professional treasury does not exclude institutional investors, which have outsourced the treasury department to a bank or the like.
There is no statutory exemption for the marketing of foreign non-registered funds to asset managers, independent financial advisers and high net worth individuals, because they do not generally have a professional treasury.
The amendment allows institutional investors, presumed to have sophisticated asset management, to be directly contacted by any non-registered foreign investment fund and its sales agent, as long as there is no public solicitation, as defined by the Investment Fund Act. This deems any solicitation of persons other than a narrowly defined group, regardless of its form, to be public solicitation. A company's existing clientele is not automatically regarded as a narrowly defined group of persons.
Under the old Investment Fund Law, replaced at the beginning of 1995, solicitation was not considered public if it incorporated less than 20 persons. A limited group of persons might be the personnel of an employer, a defined group of bank customers, or small, local business groups. Unlimited groups of persons, on the other hand, might be all the customers of a bank, or members of a corporation or club.
Finally, with respect to the offering of non-registered foreign investment funds to the public, the old regime remains valid. This means, as a rule of thumb, non-registered foreign investment funds may be sold to the public, including asset managers, if the contact between the future investor and the fund was established on the investor's own initiative.
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