In July 2015, the European Securities and Markets Authority ("ESMA") advised the European Commission, Parliament and Council (the "EU Authorities") on the extension of Alternative Investment Fund Manager ("AIFMD") passport to Swiss based fund managers (along with fund manager based in Guernsey, Hong Kong, Jersey, Switzerland, Singapore and the US) (see the advice here).

In December 2015, the European Commission (the "Commission") subsequently requested ESMA to assess six other countries. The Commission further asked ESMA to provide more details on the capacity of third country regulator, such as FINMA, and their track record in ensuring effective enforcement. ESMA was also asked to provide to the Commission data on the expected inflows of funds by type and size into the European Union ("EU") from the different third countries.

On July 19, 2015, ESMA published its second advice in accordance with the Commission mandate (see the second advice here). As for the first advice, ESMA review focused inter alia on the administrative assistance proceedings embodied in particular in the Federal Act on the Swiss Financial Market Supervisory Authority ("FINMASA").

If ESMA generally recognized the good cooperation of FINMA ("positive experience" have been reported to ESMA by EU supervisory authorities), ESMA advised the monitoring of ex-ante notification procedures (which can be challenged before courts by clients) to the extent that ex-post notifications (which allow FINMA not to inform clients in advance of information being shared with a foreign regulator) shall generally remain "exceptional" (see Article 42a para. 4 FINMASA). This recommendation is in line with the previous advice of ESMA, where the passport extension was subject to the enactment of the ex-post notification.

Despite this recommendation, no specific reserve has been made by ESMA in its final conclusion. As a result, based on its second assessment, ESMA concluded that there are no significant obstacles impeding the potential application of the AIFMD passport to Switzerland. From a technical standpoint, the light is thus still green for Swiss fund manager. The ball is now in the EU Authorities' court. Further developments, in particular with respect to a possible timetable for the adoption of an implementing act by the EU Authorities should follow in the forthcoming months.