Swiss Asset Management License Requirements
The new requirements to obtain a Swiss asset management license in Switzerland, which came into effect 1 January 2020 are as follows:
- Authorisation: Asset managers in Switzerland are required to obtain an authorisation from FINMA before conducting any activities that are subject to supervision under the Swiss Collective Investment Schemes Act (CISA).
- Minimum Capital Requirements: Asset managers must have a minimum of CHF 100,000 in share capital, or an equivalent amount in cash, that is fully paid up and available for use.
- Professional Indemnity Insurance: Asset managers must have professional indemnity insurance that covers any damages resulting from errors, omissions, or negligence in their business activities.
- Qualified Personnel: Asset managers must have at least two qualified individuals who are responsible for managing the business and ensuring compliance with the regulatory requirements. The individuals must have appropriate education, training, and experience in asset management.
- Risk Management: Asset managers must establish and implement a risk management system that identifies, assesses, and manages all risks related to their business activities.
- Conflicts of Interest: Asset managers must take appropriate measures to identify, manage, and disclose conflicts of interest that may arise in connection with their activities. They must establish internal policies and procedures to prevent conflicts of interest.
- Remuneration: Asset managers must establish a remuneration policy that aligns the interests of the asset manager with those of the investors in the collective investment schemes managed by the asset manager.
- Reporting: Asset managers must provide regular reports to investors on the performance of the collective investment schemes managed by the asset manager.
- Outsourcing: The new rules clarify the delegation and outsourcing requirements for asset managers, requiring them to establish written agreements with the third-party service providers and to ensure that the service providers meet certain minimum requirements.
- Enforcement: FINMA has increased its powers of enforcement under the new rules and can now impose fines and other sanctions on asset managers who do not comply with the new requirements.
These are the main requirements that asset managers in Switzerland must meet in order to obtain a Swiss asset management license.
Marvin Rowe, LL.M.