Registration of an investment fund in the Switzerland

Swiss law distinguishes between special financial intermediaries such as banks, insurance companies, gambling houses, stock-brokers, etc, which will require a license from FINMA and other financial intermediaries, e.g. payment service providers, credit providers, money transfer organizations which may be supervised by FINMA or SRO. This is confirmed by the Anti-Money Laundering Act 1997 (AMLA).

WHAT IS THE ROLE OF SRO

The role of the SRO is to determine the requirements for due diligence in accordance with the AMLA in the form of regulations and to monitor whether their affiliated financial intermediaries comply. 

CONSEQUENCES OF BEING MONITORED BY SRO

"Other Financial Services Intermediary companies" (asset management, etc.) supervised by SRO is exactly the same as FINMA.

In fact, as soon as a company is supervised by the SRO, its name and all information will be sent to FINMA and listed on the FINMA website.

TYPES OF FINANCIAL INTERMEDIARIES

According to the Anti-Money Laundering Act (AMLA), persons or companies acting as financial intermediaries with registered offices or branches in Switzerland must be affiliated with a self-regulating organization (SRO) or authorized by the Federal Service for the Supervision of Financial Markets (FINMA).

The SRO makes a distinction between two types of financial intermediaries:

• Financial intermediaries subject to special legislative supervision;
• Financial intermediaries subject to special legislative supervision that require additional licensing/permit by FINMA to operate.

These are:

• Banks;
• Insurance companies;
• Gambling houses.

Other financial intermediaries (operating in the banking sector):

In contrast to the above mentioned financial intermediaries subject to special legislative supervision, other financial intermediaries, so-called "alternative financial sector" or "parabankan sector" can, after they have applied for and been directly supervised by FINMA or SRO, start their business activities without the need to obtain additional licenses or permit.

OTHER FINANCIAL INTERMEDIARIES: AS DEFINED IN AMLA

According to article 2 (3) of the AMLA, they are defined as "persons who professionally accept or keep on deposit assets owned by other persons or who assist in investment or transfer of such assets."

WHAT TYPES OF SERVICES OTHER TYPES OF FINANCIAL INTERMEDIARIES MAY PROVIDE

In accordance with article 2, paragraph 3, of the AMLA, they include persons who:

• perform credit operations (in particular, for consumer loans and mortgages, factoring, commercial financing or financial leasing);
• provide services related to payment transactions, in particular, perform electronic transfers on behalf of other persons or issue or manage such payment means like credit cards and traveler's checks;
• trade at their own expense or at the expense of other persons in banknotes and coins, money market instruments, foreign currency, precious metals, goods and securities (shares and securities rights), as well as their derivative instruments;
• manage assets;
• make investments as investment advisers;
• hold securities in custody or manage securities.

ADVANTAGE OF BEING A SWISS FINANCIAL INTERMEDIARY OVER BEING AN EU STATUS

The main advantage is that the capital requirement is lower than in Europe and only capital of CHF 100,000 is required.

The second advantage is that other Swiss financial intermediaries can trade both at their own expense and at the expense of others. Now, in any other EU jurisdiction, a company that wishes to trade at its own expense must have a capital of at least CHF 750,000.