New type of fund products shall increase Switzerland’s attractiveness for the fund industry

10 Sep 2018

Pursuing to improve the attractiveness of Switzerland as a financial center for the fund industry, the Swiss Federal Council instructed the Federal Department of Finance to prepare a proposal for a legislative initiative. The aim is to introduce a new type of fund products that does not require an approval by the Swiss Financial Market Supervisory Authority FINMA. 

What is it about?

With the new type of fund products – Limited Qualified Investor Fund (L-QIF) - Switzerland would follow the example of other important fund locations, such as Luxembourg and thus increase its competitiveness by launching a cheaper and more flexible product type. 

What will the new fund product type look like?

The principal criterion of L-QIFs is the dispensability of a FINMA approval that would make the product a cost-effective and competitive alternative with a fast time-to-market possibility – thus responding to the specific clients’ needs. 

L-QIFs is foreseen to be limited to qualified investors as defined by the CISA which will be referencing to professional clients (such as pension funds and insurance companies) with the introduction of FinIA/FinSA in 2020. 

What’s next?

The Federal Department of Finance has now almost one year to submit its legislative proposal by mid-2019. The proposal will then undergo a consultation process. 

The aim of the Swiss Fund and Asset Managers Association SFAMA that initiated the idea of the L-QIF to launch the new fund type simultaneously with FinIA/FinSA on 1 January 2020 seems unlikely, but the big step towards a more attractive fund location is done. 

Summary
  • Swiss government aims to improve Switzerland’s attractiveness for the fund industry
  • New fund type proposed in Switzerland – L-QIF
  • L-QIF shall not require an approval by FINMA
  • L-QIF shall be open to qualified investors and professional clients

 

Contacts

Nelli Galis

Manager Legal , PwC Switzerland

+41 58 792 2862

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