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SFA supports partial revision of the CISA

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The Swiss Funds Association SFA supports the primary objectives of the partial revision of the Swiss Federal Act on Collective Investment Schemes (CISA). As part of the revision processes, it has submitted specific proposals for improvements aimed at safeguarding the competitiveness of Switzerland as an asset management location.

The SFA supports the objectives of the partial revision of the CISA: 1. to close gaps in the regulations, and 2. to bring it in line with the AIFM Directive so as to secure market access for the management, custody, and distribution of collective investment schemes. “We want to have the most attractive environment possible for the further development of Switzerland as an asset management location. In light of the time pressure involved, the SFA welcomes the rapid action of the Federal Council, but cautions against exaggerations and unnecessary protectionism,” says SFA President Martin Thommen at a media conference on 11 October 2011 in Zurich.

As part of the consultation process for the partial revision of the CISA, the SFA has also made its own additional proposals, including some relating to taxation. “We regard this approach as being essential, given that an appropriate package of measures is required not just for the adoption of international standards and securing access to the European AIF market, but also for strengthening the competitiveness of Switzerland as a production location for collective investment schemes. We have focused on selected proposals that promise maximum benefit with minimal legislative workload,” says SFA CEO Dr Matthäus Den Otter.

The asset managers of all collective investment schemes are now to be brought under FINMA supervision, something that the SFA supports. The SFA proposes various amendments in specific instances, in particular with regard to the possible legal structures and the range of services for asset managers. It should now also be possible for foreign asset managers to open branch offices in Switzerland. The principles of consolidated supervision should only be applied where this is required by international standards. For smaller asset managers, a longer transitional period for the changeover should be envisaged.

As regards custody, the proposed shift in the burden of proof in the case of the liability of the custodian bank for custody by sub-custodians abroad will likely be necessary for Swiss regulations to be recognized by the EU. The Federal Council’s proposals in this regard will also improve investor protection, and the SFA considers them sensible. However, the standpoint of the custodian banks also has to be taken into account here.

As regards distribution, although the SFA accepts replacing the term "public advertising" with "distribution", it proposes adding certain necessary details to prevent misunderstandings and undesired results. Certain minimum requirements for the distribution of foreign collective investments schemes to qualified investors also make sense. However, in this regard the SFA is against the proposal that the newly created representative should “at all times” monitor the equivalence of asset management, custody and investor protection at the domicile of the collective investment scheme concerned.

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