Fund management regulation

Regulatory framework and authorities

How is fund management regulated in your jurisdiction? Which authorities have primary responsibility for regulating funds, fund managers and those marketing funds?

Investment fund business in Switzerland is governed by:

  • the Collective Investment Schemes Act (CISA);
  • the Collective Investment Schemes Ordinance (CISO);
  • the FINMA Collective Investment Schemes Ordinance (CISO-FINMA);
  • the FINMA Collective Investment Schemes Bankruptcy Ordinance (CISBO-FINMA);
  • the Financial Institutions Act (FinIA);
  • the Financial Institutions Ordinance (FinIO);
  • the FINMA Financial Institutions Ordinance (FinIO-FINMA);
  • the Financial Services Act (FinSA); and
  • the Financial Services Ordinance (FinSO).


In addition, the Swiss Financial Market Supervisory Authority FINMA (FINMA), as the competent regulatory body and supervisory authority, has published circulars addressing specific areas of collective investment schemes law.

Market participants must also comply with self-regulation of industry organisations recognised by FINMA as a minimum standard, namely the code of conduct and various guidelines of the Asset Management Association Switzerland (formerly Swiss Funds & Asset Management Association (SFAMA)) and the guidelines of the Swiss Bankers Association.

The CISA contains product-specific rules for domestic and foreign funds and, as a framework law, leaves many matters to be regulated in detail to the implementing ordinances.

The licensing and supervision of fund management companies, managers of collective assets (including domestic and foreign funds as well as pension schemes), portfolio managers of individual assets and trustees are governed by FinIA and its implementing ordinances.

The FinSA and its implementing ordinance are applicable across sectors and provide for a set of conduct rules at the point of sale covering all financial instruments and services, including funds and certain fund-related financial services. FinSA also governs the prospectus and basic information sheet (KID) requirements for funds.

Some of the provisions in the CISA, FinIA and FinSA are still subject to a transitional regime.

FINMA approves funds as products (in particular, contractual funds (FCP)) and is also responsible for the authorisation and supervision of the following institutions responsible for the management and safekeeping of assets of funds in Switzerland:

  • fund management companies;
  • investment companies with variable capital (SICAV);
  • partnerships for collective investment (LP);
  • investment companies with fixed capital (SICAF);
  • custodian banks of domestic funds;
  • managers of collective assets;
  • portfolio managers; and
  • representatives of foreign funds.


The day-to-day supervision of portfolio managers is conferred to supervisory organisations authorised by FINMA. Portfolio managers may be entrusted only with the asset management of domestic or foreign qualified investor funds below a defined de minimis threshold.

SICAVs, LPs and SICAFs require a twofold FINMA authorisation of a fund product (in the form of a company) as well as an institution (in the form of a licence holder).

Further, a ‘dual supervisory regime’ applies, which requires regulated entities to appoint a FINMA-recognised auditor to verify whether they comply with all applicable legal requirements.

Fund administration

Is fund administration regulated in your jurisdiction?

Fund administration forms part of the main duties of a fund management company of an FCP or an externally managed SICAV, of a self-managed SICAV, of an LP or of a SICAF and is generally regulated and supervised as part of these licences.

The delegation of fund administration tasks to unregulated third-party providers is also permitted, provided that the delegation is in the interest of efficient management and that those persons appointed are properly qualified to execute the tasks. Furthermore, instruction, monitoring and control of the agent must be ensured. The management of a fund and the related tasks, such as the valuation of investments or the decision on the issue of units, may not be outsourced.  

The delegation of fund administration is subject to the prior authorisation of FINMA. For a delegation abroad, specific requirements apply.


What is the authorisation or licensing process for funds? What are the key requirements that apply to managers and operators of investment funds in your jurisdiction?

Switzerland is a niche production market but ranks among the top distribution markets in Europe. As at February 2021, 9,944 funds were registered in Switzerland, of which only 1,790 were domiciled in Switzerland. The majority of the fund assets under management in Switzerland are invested in funds for qualified investors.

The timing and process for approval and authorisation depend on whether a fund is organised under Swiss or foreign law.


Domestic funds

The CISA distinguishes between open-ended and closed-ended funds.

Open-ended funds may be structured in the form of an FCP or a SICAV. Investors have a direct or an indirect legal entitlement to redeem their units at the net asset value.

In the case of an FCP, the fund management company and the custodian must be authorised by FINMA and the fund contract, with the consent of the custodian, must be submitted to FINMA for approval. The FCP is the predominant legal form of collective investment scheme organised under Swiss law.

FINMA must authorise all SICAVs and approve their articles of association and investment regulations.

The timing and process of FINMA authorisation and approval largely depend on the complexity of the fund (investment policy, investment techniques, etc).

In closed-ended funds (LPs or SICAFs), investors have neither a direct nor an indirect legal entitlement to redeem their units at the net asset value.

Both the LP and the SICAF require authorisation by FINMA and their limited partnership agreement (for LPs) and the articles of association and investment regulations (for SICAFs) require FINMA’s approval.

 Foreign funds

The majority of foreign funds approved for offer to non-qualified investors in Switzerland are undertakings for collective investment in transferable securities (UCITS). FINMA has standardised the approval process for UCITS over a number of years. The application is to be filed electronically by the Swiss representative together with the relevant fund documents for Switzerland.

As one of the very few non-UCITS funds, the first Hong Kong-based fund was approved for offer to non-qualified investors in Switzerland in 2017.

 Managers and operators

Anyone applying for FINMA authorisation to operate as a financial institution must meet the following minimum authorisation requirements:

  • persons responsible for the management and business operations must have a good reputation, guarantee proper management and possess the requisite specialist qualifications;
  • significant equity holders must have a good reputation and not exert their influence to the detriment of prudent and sound business practice;
  • compliance with the duties stemming from FinIA and CISA must be assured by internal regulations and an appropriate organisation;
  • sufficient financial guarantees must be available; and
  • any additional authorisation conditions set forth in FinIA and its implementing ordinances are met.
Territorial scope of regulation

What is the territorial scope of fund regulation? Can an overseas manager perform management activities or provide services to clients in your jurisdiction without authorisation?

Swiss legislation governing fund management has an extraterritorial scope and captures the following fund business activities.

The CISA concerns:

  • domestic funds and persons responsible for the safekeeping of assets; and
  • foreign funds offered or advertised in Switzerland and persons representing foreign funds in Switzerland.


FinIA concerns:

  • Persons managing domestic and foreign funds in or from Switzerland (fund management companies, managers of collective assets, portfolio managers).


FinSA concerns:

  • persons providing the following financial services in Switzerland or to clients in Switzerland:
    • sale or purchase of financial instruments (including interests in funds);
    • receipt and transmission of orders of financial instruments;
    • management of financial instruments (portfolio management);
    • personal recommendations relating to transactions on financial instruments (investment advice); and
    • granting of loans to finance transactions with respect to financial instruments.


(i) Financial services rendered by a foreign financial service provider within an existing client relationship which was requested by the explicit initiative of a client or (ii) individual financial services which were requested by the explicit initiative of clients from a foreign financial service provider are considered not performed in Switzerland and, therefore, are not captured by the FinSA.

All legal or natural persons carrying on an activity regulated under CISA or FinIA in Switzerland require authorisation from FINMA. The rendering of financial services in Switzerland or to clients in Switzerland governed by FinSA does not trigger a licensing requirement by FINMA but requires the financial service provider and client adviser to comply with certain duties and requirements.

A foreign fund management company cannot act as a fund management company for domestic funds. However, a Swiss fund management company may delegate specific tasks to a foreign fund management company provided this is in the interest of efficient management and the head office and main administration remain in Switzerland.

The asset management of a domestic fund may be delegated to overseas managers who are subject to a licensing and supervisory regime equivalent to that applicable to a Swiss manager of collective assets. Where foreign law requires an agreement on cooperation and the exchange of information with foreign regulators, a delegation to an overseas manager may only take place where such agreement exists between FINMA and the competent foreign regulator.

If the overseas manager is managed in Switzerland or conducts its business largely or exclusively in or from Switzerland, it must be organised in accordance with Swiss law. FINMA authorisation is required when an overseas manager employs persons in Switzerland who conduct, on a permanent commercial basis in or from Switzerland, asset management and certain other activities on its behalf (branch office) or forward client orders or represent the manager for marketing or other purposes (representative office). Branch and representative offices of foreign fund management companies are prohibited.


Is the acquisition of a controlling or non-controlling stake in a fund manager in your jurisdiction subject to prior authorisation by the regulator?

The direct or indirect holding and acquisition of a qualified holding in a fund management company or a manager of collective assets or any change thereof requires the prior authorisation of FINMA. However, there is no such requirement for a qualified holding in a portfolio manager or a trustee. A qualified holding is given, if a person holds directly or indirectly at least 10 per cent of the share capital or votes or if a person can significantly influence the business activity of the financial institution in another manner.

All qualified equity holders (including qualified equity holders in a portfolio manager or a trustee) must provide proof that they have a good reputation and do not exert their influence to the detriment of prudent and sound business practice.

Restrictions on compensation and profit sharing

Are there any regulatory restrictions on the structuring of the fund manager’s compensation and profit-sharing arrangements?

The only fees and incidental costs chargeable to a Swiss fund are those set out in the relevant fund regulations in accordance with the statutory provisions of the CISA and CISO. These include the management fee as well as any performance fee. The intended use of the management fee must be disclosed, as detailed in the SFAMA Transparency Guidelines recognised by FINMA as the minimum standard.

FINMA Circular 2010/1 sets out minimum standards for salary and remuneration policies of financial institutions that generally apply to licensees under the CISA and fund management companies, managers of collective assets and portfolio managers under FinIA only on a voluntary basis.

Law stated date

Correct on

Give the date on which the information above is accurate.

27 May 2020.