Pan-European expertise in depositary banking
The last 12 months have seen BNP Paribas Securities Services continue to expand its depositary banking network across Europe. In November 2013 the group acquired the depositary banking business of Commerzbank in Germany and subsequently saw the firm widen its footprint by announcing the launches of its depositary banking business in the UK, the Netherlands and more recently in Switzerland. The group‘s depotbank network now spans 12 fund domiciles in Europe and three in Asia Pacific.
Since Switzerland is not a part of the European Union, AIFMD is not applicable in the market, but it is impacted by the directive as the Authorities had to align the Swiss legislative framework with the standards of the Alternative Investment Fund Managers Directive (AIFMD) by adopting the Revised Swiss Collective Investment Schemes Act (CISA) which incorporates asset protection for underlying securities.
As a FINMA regulated depotbank, BNP Paribas Securities Services in Switzerland offers fund servicing capabilities and provides asset safekeeping, cash monitoring and general oversight. Asset managers and asset-owner clients with funds domiciled in Switzerland are currently able to benefit from the group‘s established pan-European expertise in depositary services.
At the time of announcing the new depotbank services in Switzerland, Garrick Smith, Head of BNP Paribas Securities Services Switzerland, said: “This new expansion is the result of an increasing desire from our clients to consolidate their operational services, including depotbank and custody services, in Switzerland. We have already won our first depotbank mandate in the market, from one of the largest independent fund of fund managers in Switzerland.”
“In addition, and contrary to other players who only offer fund servicing in Luxembourg and Ireland, we can accompany Swiss managers to other key fund domiciles (i.e. France, Germany, UK, Channel Islands, Italy) where they may to benefit from our international experience, the strength of being supported by a global banking group with a greater – and established – international presence,” added Jeffrey Campbell (pictured), Head of Sales to Swiss Asset Managers.
“From a business perspective, we have a number of asset owners and insurance companies who are interested in our depotbank services. They’ve been keen on discovering a Swiss provider who can act as a both a local player and an international player in their ability to offer other markets that align with their own strategy for growth.“ According to Campbell, “The ability to offer fund servicing for Swiss domiciled funds was the missing link in our strategy to propose a combined fund servicing solution that includes other key domiciles such as Luxembourg and Ireland.“
“It’s still early days, but our announcement has been well received in Switzerland. Interest is starting to build, and as far as we are concerned, the potential for business growth is clear,” confirms Smith, stating that at least two more Swiss funds are expected to launch before the end of 2014.
“With this strategic development, and taking into account local market trends, the ability to provide local depotbank services to managers handling Swiss funds is critical to our strategy to service both local asset owners and asset managers going forward.”
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