The Swiss Funds Association (SFA) only agrees in part with the Federal Council’s dispatch with regard to a partial revision of the Collective Investment Schemes Act (CISA).
In particular, the SFA is critical of the globally unique discrimination of the Swiss financial sector and the lack of measures to strengthen competitiveness. Improvements must be made to prevent the loss of jobs and the migration of entire product categories.
The Federal Council published its dispatch in respect of a partial revision of the CISA on 2 March 2012. Following a thorough analysis, the SFA has concluded that this only achieves certain objectives. With regard to distribution regulations and the liability requirements for custodian banks, the draft overshoots the target in many respects. Many CISA provisions go beyond the EU standards, or create specific Swiss features where there are no international standards. There are no proposals whatsoever for strengthening competitiveness in the value-chain segments asset management, administration and distribution of collective investment schemes, this despite the fact that these were specifically covered in the Federal Council’s report on strategic directions for Switzerland’s financial market policy.
“We face major challenges in private banking and investment banking. In this difficult situation for the Swiss financial sector, asset management can be an important third mainstay. The partial revision of the CISA is therefore of great importance, and we must not make any mistakes here. We already lost key parts of the fund business to other countries once before. We do not want to see this happen again with regard to investors, asset management and funds for qualified investors, or in the case of distribution. We will be working together with the Swiss Bankers Association in this matter,” says SFA President Martin Thommen at a media conference in Zurich.
“We welcome the new provisions on management and custody. That said, the dispatch contains new, discriminatory provisions on the distribution of collective investment schemes in or from Switzerland. These proposed regulations on distribution go far beyond the EU standards. They impair Swiss asset managers in institutional fund distribution by imposing a “globally applicable standard” of unprecedented strictness. Global fund distribution should not be constrained in an EU straightjacket,” says Dr Matthäus Den Otter, CEO of the SFA.
The competitiveness of Switzerland as a production location for collective investment schemes must be improved if it is to be able to hold its own in the new pan-European market. The corresponding proposals submitted by the SFA in the consultation process have not been adopted by the Federal Council. The key facets for the SFA are as follows:
Expanding the scope with regard to single investors / possibility of delegating asset management to single investors
Expanding permissible investments for Swiss limited partnerships for collective investments
Proposals for the better functioning of investment companies with variable capital (SICAVs)
Expanding the permitted investments in the case of real estate funds.
Without the improvements proposed by the SFA in the consultation phase, major asset managers will cut jobs in distribution in Switzerland and Switzerland will become unattractive for foreign asset managers. Furthermore, the volume of Swiss funds for qualified investors (QIF, CHF 317 billion as of the end of 2011) will stagnate and will migrate abroad over the long term. There is the threat of the range of funds on offer for Swiss institutionals being “slashed”.