Solutions for yet-to-be licensed Swiss asset managers

The Swiss Financial Institutions Act (FINIA), which came into effect on 1 January 2020, requires asset managers operating in Switzerland to be authorised by the regulator. Asset managers offering services at the date the Act became effective have had three years to apply for a licence to allow them to continue their business activities in Switzerland.  

That deadline – 31 December 2022 – is now less than a month away. Asset managers who fail to obtain a licence will no longer be able to offer asset management services from 1 January 2023.  

So far, only a small number (an estimated 20%) have applied for and been granted a licence. The issue for many – in particular, smaller asset managers – is the cost of applying. For others, the complicated and time-consuming application process is the hurdle, with applications taking up to six months to process, creating a bottleneck. 

ZEDRA’s Luxembourg team is currently discussing with a number of Swiss alternative asset managers how it could provide a solution that would allow Swiss asset managers that have not yet obtained the new licence to continue to serve their Swiss clients and comply with the regulatory requirements post 1 January 2023. 

For example, ZEDRA’s Luxembourg Funds toolbox allows ZEDRA to create a fund structure managed by a General Partner and advised by an investment advisor in Luxembourg, under the hat of a Luxembourg Alternative Investment Fund Manager (AIFM), which is either registered or authorised in Switzerland. This means that the fund promoter can focus on the core activities – asset allocation and investment decisions, as well as the relationship with the end client – while the AIFM carries on its usual duties as the regulated entity.  

These structures also have the advantage of being straightforward and cost-effective to set up and can be tailored to the client’s needs. 

ZEDRA’s Luxembourg Funds team is approved by the Luxembourg regulator, the Commission de Surveillance du Secteur Financier (CSSF), which has a Memorandum of Understanding with FINMA, the Swiss regulator. This means that ZEDRA can act as a registered AIFM for Swiss asset managers, allowing them to continue to conduct business in Switzerland.  

The legal environment is frequently changing and being updated in various jurisdictions. Our deep knowledge of local regulatory requirements, together with our broad expertise in the various existing funds structures, allows us to find the most appropriate solutions for our clients wherever we are, to make things happen.

If the approaching deadline is a cause of concern for your Swiss asset management business, please reach out to our Luxembourg Funds team, who can talk you through the solutions ZEDRA can offer you. 

Our Luxembourg office also receives regular requests from Swiss asset managers that need to locate other investment products (such as structured products) or create extremely short time-to-market fund structures (for off-market opportunities needing a swift solution or for offloading assets belonging to entities that need to sell or restructure a portfolio). For these clients, we can use the power of our network and provide ‘Channel Islands’ solutions. 

For more information, contact Charles-Alexandre Houillon or Wim Ritz.