Investment Funds 2024 Comparisons

Legal Framework

The key statutes and implementing ordinances governing the establishment and operation of AIFs and their managers are as follows:

• the Swiss Collective Investment Schemes Act (CISA);
• the Swiss Collective Investment Schemes Ordinance (CISO);
• the Swiss Collective Investment Schemes Ordinance of the Swiss Financial Market Supervisory Authority (CISO-FINMA); and
• the Swiss Ordinance of FINMA on Bankruptcy of Collective Investment Schemes (CISBO-FINMA).

In addition, the following legislation sets out the legal framework for financial institutions acting as fund management companies and investment managers of AIFs and their assets:

• the Swiss Financial Institutions Act (FinIA);
• the Swiss Financial Institutions Ordinance (FinIO); and
• the FINMA Swiss Financial Institution Ordinance (FinIO-FINMA).

Finally, sales of financial instruments including AIFs to clients in Switzerland are governed by:

• the Swiss Financial Services Act (FinSA); and
• the Swiss Financial Services Ordinance (FinSO).

Open-Ended Funds

There are two forms of regulated Swiss open-ended collective investment schemes. Swiss-domiciled AIFs are typically structured as fund of funds in the form of open-ended funds, as either:

• contractual investment funds (FCPs) with no legal personality; or
• corporate funds in the form of an investment company with variable capital (SICAV) in the category of “other funds for alternative investments”.

“Other funds for alternative investments” include open-ended collective investment schemes whose investments, structure, investment techniques (short selling, borrowing of funds, etc) and investment restrictions exhibit a risk profile that is typical for alternative investments. FCPs and SICAVs are subject to the same investment rules.

Reference to the special risks involved in AIFs must be made in the fund name, and in the prospectus and marketing material. The prospectus must be offered free of charge to interested persons prior to an agreement being concluded or prior to subscription. FINMA may allow transaction-related settlement services of a directly investing other fund for alternative investments to be provided by a regulated institution specialising in such transactions (prime broker). It may specify which monitoring functions must be undertaken by the fund management company and the SICAV.

Swiss investment fund regulation does not provide for additional vehicles specifically designed for AIFs. In practice, however, the Swiss fund structures available for alternative investments are often not suitable alternatives to well-established non-Swiss AIF offshore locations such as Jersey, Guernsey or the Cayman Islands, which provide for more flexibility as to the possible investments, leveraging and customisation. Popular European onshore locations for AIFs include Luxembourg and Ireland.

Open-ended collective investment schemes can be set up in the form of L-QIFs in accordance with CISA as of 1 March 2024. Such L-QIFs (as either FCPs or SICAVs) are only available to qualified investors, and are subject to indirect supervision.

Closed-Ended Funds

As provided by CISA, Swiss-domiciled AIFs can also be structured as a limited partnership for collective investment schemes (Swiss LP) or a company with fixed capital (SICAF).

SICAF

A regulated SICAF is a Swiss company limited by shares whose corporate purpose is limited to the investment and management of its own assets, with no entrepreneurial activity. However, as the regulatory framework provided by CISA is rather limited, the SICAF is substantially governed by the Swiss Code of Obligations. SICAFs have no practical relevance in Switzerland as Swiss limited companies are not subject to CISA and are therefore not regulated by FINMA if their shares are listed on a stock exchange or if their shareholders are exclusively qualified investors as defined by CISA and only registered shares are issued.

Investment companies benefit from this safe harbour (see Unregulated Investment Companies below). As a result, no SICAF is currently registered with FINMA and subject to prudential supervision by it.

Swiss LP

The Swiss LP has been introduced not only for alternative investments but also for private equity investments, real estate, construction and infrastructure projects. The sole purpose of a Swiss LP is collective investment, and it conducts investments in risk capital under rather flexible investment guidelines. A Swiss LP requires a partnership agreement, with at least one member being the general partner and therefore subject to unlimited liability for the commitments of the Swiss LP. This general partner must be a Swiss company limited by shares and can be appointed as a general partner of one Swiss LP only.

The minimum share capital requirement for the general partner is CHF100,000. However, no capital requirements apply to the Swiss LP. The investors in the Swiss LP are the limited partners, and they are only liable for a specific amount. Only qualified investors as defined in CISA are eligible to invest in the Swiss LP. The Swiss LP is a structure regulated by FINMA, so must obtain a FINMA licence and is subject to ongoing prudential supervision by FINMA. There are currently approximately 20 Swiss LPs registered with FINMA.

Closed-ended collective investment schemes can be set up in the form of L-QIFs in accordance with CISA as of 1 March 2024. Such L-QIFs (only in the form of Swiss LPs) are only only available to qualified investors and are subject to indirect supervision.

Unregulated Investment Companies

Unregulated investment companies are very popular as they are suitable for investments in alternative asset classes. Specifically, these companies are subject to the Swiss Code of Obligations only and are not within the scope of CISA if the shares of the investment company are listed on a Swiss stock exchange, or if only registered shares are issued and the investment is restricted to qualified investors.

If these conditions are not met, the investment company falls within the scope of the (regulated) SICAF, as described above. Unregulated investment companies domiciled in Switzerland are popular for investments in private equity, hedge funds, venture capital and real estate vehicles.

Licensing Requirements

All Swiss AIFs require a licence from FINMA, regardless of their organisational structure or the type of investors. Subject to limited de minimis exemptions provided in FinIA for asset managers of collective investment schemes, asset managers of AIFs must obtain a FINMA licence as the manager of collective assets prior to engaging in asset management activities for AIFs.

The length of the FINMA authorisation and approval process largely depends on the complexity of the fund, including its investment policy, investment techniques, etc, as well as the current workload of FINMA. As a rule of thumb, FINMA seeks to approve AIFs that are open to all investors within two months and AIFs that are only open to qualified investors within one month from the date it receives a complete filing. However, it is not unusual for FINMA approval processes to take up to six months in practice.

Open-Ended Funds

FCPs

FCPs are established by a tri-party fund contract between the investors, the fund management company and the custodian bank. The fund management company and the custodian bank must be authorised by FINMA, and the fund contract – with the consent of the custodian bank – requires FINMA approval. Under the fund contract, the fund management company undertakes to manage the assets of the fund independently and in its own name, in accordance with the fund contract. It is further obliged to ensure that the investors participate in the investments proportionally to their assets.

SICAVs

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

For the most part, the establishment of a SICAV takes place according to company law rules under the Swiss Code of Obligations. The only exception relates to corporation formation rules pertaining to contributions in kind, acquisitions in kind and particular advantages, as CISA governs those situations specifically.

To establish a SICAV, an act of incorporation in the form of a public deed is required. The deed must include the articles of incorporation and the investment guidelines. In addition, the officers of the SICAV must be appointed upon the incorporation of the SICAV. SICAVs may delegate management to a third party, which must be a fund management company subject to prudential supervision by FINMA.

Closed-Ended Funds

Both the Swiss LP and the SICAF require FINMA authorisation, and FINMA approval is required for the limited partnership agreement for LPs, and for the articles of incorporation and investment regulations for SICAFs.

SICAF

The rules of the Swiss Code of Obligations apply to the establishment of a SICAF, which itself must obtain a FINMA licence confirming that its international organisation is appropriate according to CISA. In addition, the articles of incorporation and the investment guidelines are subject to review regarding their compliance with the applicable law, and must be approved by FINMA. Currently, there are no SICAFs registered with FINMA.

Swiss LP

The establishment of a Swiss LP, for the most part, takes place according to the company law rules on ordinary limited partnerships as provided in the Swiss Code of Obligations. The general partner must be a Swiss corporation and can only act in such capacity for one Swiss LP, unless it holds a FINMA licence as a manager of collective assets. Only qualified investors are eligible to invest in a Swiss LP.

Unregulated Investment Companies

CISA provides that an investment company organised as a company limited by shares is not within the scope of CISA, provided that it has qualified investors and registered shares only, or that its shares are listed on a Swiss stock exchange. To establish an unregulated investment company, the ordinary process to form and register a corporation pursuant to the rules of the Swiss Code of Obligations is followed. The articles of incorporation must provide that only qualified investors can become shareholders. No regulatory licensing process or approval will be required in connection with setting up an unregulated investment company.

Investors are only liable for their investment in a Swiss open-ended AIF. Funds and SICAVs may be structured as umbrella funds with various sub-funds. In such cases, investors are only entitled to the income and assets of the sub-fund in which they are invested, and each sub-fund is only liable for its own liabilities.

With respect to a closed-ended Swiss LP, the general partner’s liability is not limited, while the limited partners are only liable for their investment. With respect to a SICAF, the shares are those of a typical corporation, so investors are only liable for full payment of their investment.

Prospectus Requirements

Open-ended funds

Open-ended AIFs including FCPs and SICAVs must issue a prospectus with information on the investment policy, the investment techniques including leverage and short selling, and the maximum level of management fees. Furthermore, the prospectus must include the fund regulations.

Any fund that may be offered to retail investors requires a key information document (KID) for investors. The minimum information to be included is set out in FinSO.

Closed-ended funds

Swiss LPs must issue a prospectus including the partnership agreement, which is subject to FINMA approval. The SICAF must issue a prospectus as well, including the articles of incorporation and the fund regulations. Currently, there are no SICAFs registered with FINMA.

Foreign funds

Foreign AIFs not approved by FINMA for marketing to retail investors can only be marketed to qualified investors in Switzerland. For further details, please see 2.3.6 Rules Concerning Marketing of Alternative Funds.

Reporting Requirements

Open-ended collective investment schemes and Swiss LPs must maintain accounts and publish an annual and semi-annual report. The annual report must be published within four months after the end of the financial year and must include the following:

• financial statements;
• information on the number of shares/units issued and redeemed during the financial year, as well as the total number of shares/units outstanding;
• an inventory of the fund’s assets at market value;
• valuation principles;
• a breakdown of buy and sell transactions; and
• the performance of the open-ended collective investment scheme (possibly benchmarked against comparable investments).

The report should also include information on matters of particular economic or legal importance, such as amendments to regulations, change of manager, custodian bank, directors or officers, and legal disputes.

The semi-annual report must be published within two months after the end of the first half of the financial year. Among other things, it must include unaudited financial statements, information on shares/units issued and redeemed during that period and the number of shares/units outstanding, the inventory of the fund’s asset at market value and a breakdown of buy and sell transactions.

Upon request, open-ended AIFs or their managers must provide information regarding the basis of the calculation of the net asset value per unit. Investors may also require further information on a specific transaction, including the exercise of voting rights, creditors’ rights or risk management.

Investment companies not subject to CISA must observe the general rules on financial reporting.

Foreign AIFs have no specific reporting obligations in Switzerland as they do not need to be approved by FINMA for marketing in Switzerland. This is different for foreign retail funds.

Due to the high number of sophisticated investors, there is significant appetite for AIFs in Switzerland. The market consists mainly of institutional investors, including private and public pension funds, insurance companies, family offices and financial intermediaries, which invest on behalf of their clients in Switzerland and abroad. There is also a significant number of high net worth individuals who invest into AIFs directly, or through their family office.

Please see 2.1.1 Fund Structures for details on Swiss-domiciled fund structures.

There are no restrictions on local investors investing in Swiss AIFs per se, but certain financial institutions and other qualified investors, such as pension funds and insurance companies, are only allowed to invest a certain amount of their net assets in AIFs. In particular, pension funds can invest directly in AIFs if they are specifically mentioned by the investment regulations and if they comply with the general principles for safe and diversified asset management.

Among open-ended collective investment schemes, open-ended AIFs offer the broadest range of investments and strategies. In particular, they are specifically designed to carry out investments that have only limited marketability, are subject to strong price fluctuations, exhibit limited risk diversifications or may be difficult to value. They may engage in short selling and borrow funds.

Specifically, open-ended AIFs may invest in the following:

• securities;
• units in collective investment schemes;
• money market instruments;
• sight and time deposits with a maturity of up to 12 months;
• precious metals;
• derivative financial instruments whose underlying assets are securities, collective investment schemes, money market instruments, derivative financial instruments, indices, interest rates, exchange rates, loans, currencies, precious metals, commodities or similar instruments; and
• structured products.

FINMA can also authorise other investments, including commodities and commodity certificates, if mentioned by the investment regulations. AIFs are subject to lower restrictions than funds for traditional investments, which means that:

• loans can be raised for an amount up to 50% of the fund’s net assets;
• up to 100% of the fund’s net assets can serve as collateral;
• overall exposure can be up to 600% of the fund’s net assets; and
• they can engage in short selling.

Swiss LPs can invest in risk capital, including private equity, debt and hybrid forms. They can also engage in construction, real estate and infrastructure projects, as well as alternative investments in general. They can take control of companies and have a board seat with these companies to safeguard the interests of the limited partners.

Swiss AIFs must comply with the general investment restrictions set out for the pertinent type of collective investment scheme. They can enter into derivative transactions if the economic effects of using derivatives do not result in a breach of the investment objectives as outlined in the fund regulations and the prospectus.

Restrictions to certain assets – including residential real estate in Switzerland, banks, financial institutions and other industries – may apply but are not driven by fund regulation.

The fund management company, SICAV, Swiss LP, SICAF and investment manager of a fund domiciled in Switzerland must be subject to prudential supervision by FINMA and hold the pertinent licence. Only a Swiss-domiciled bank subject to prudential supervision by FINMA can act as the custodian bank of a Swiss-domiciled fund.

While Switzerland needs to be the effective place of management for Swiss funds, certain functions can be delegated to third parties, both in Switzerland and abroad, if they have the required capability, knowledge, experience and licences. Compared to FINMA's Risk Monitor for 2022, the risks associated with liquidity and funding, and with the outsourcing of business activities, are considered to be more significant, with the result that they are now included in the Risk Monitor that was published in November 2023.

Non-Swiss domiciled managers cannot manage funds domiciled in Switzerland because the effective place of management needs to be in Switzerland (please see 2.3.2 Requirements for Non-local Service Providers).

Please see 2.1.2 Common Process for Setting Up Investment Funds.

Unlike the EU, Switzerland does not have a legally defined concept of “pre-marketing” – ie, general information that falls short of marketing a specific fund. In general, any activity addressed directly at certain clients that is specifically aimed at eliciting the acquisition or disposal of units in the fund qualifies as a financial service, triggering the respective requirements under FinSA. Separately, marketing activities may constitute an offer for the purposes of CISA, but even mere advertising below such threshold may already trigger certain requirements thereunder.

While pre-marketing is not an activity defined by law, for a sales activity to be considered as a financial service pursuant to FinSA, the fund in question must in principle exist or its key terms should at least be defined. This is the case if it is already established or, at the least, if the key characteristics have been established, such as the name of the fund, the main parties, the investment policy, fees, and issuing and redemption terms that will enable investors to make an informed decision.

On this basis, exploratory discussions with potential investors on their general interest to invest in a new fund that is still in the early stage of its inception or abstract discussions with potential investors not relating to a specific product are not deemed to constitute a financial service or an offer/advertising for a fund. This is the case, for example, if information is provided on certain strategies or composites without reference being made to an actual specific product.

New Regulatory Regime – Duties Under FinSA

FinSA and its implementing ordinance FinSO entered into force on 1 January 2020. Under FinSA, regulatory duties in connection with the marketing of AIFs to clients in Switzerland include the following:

• a duty to register the individuals who actually perform financial services on behalf of the (foreign) financial service provider in a new register of client advisers (although client advisers of foreign financial service providers are exempt from the duty to register under the condition that the foreign financial service provider is subject to prudential supervision and limits its financial services to per se professional and/or institutional clients in Switzerland);
• all financial service providers active in Switzerland, including those marketing funds, must join an ombudsman office, unless they are targeting professional and/or institutional clients only in Switzerland;
• a duty to categorise clients into private clients, professional clients and institutional clients (see 2.3.10 Investor Protection Rules for the investor categories);
• a duty to comply with expanded conduct rules; and
• a duty to comply with certain organisational requirements, including by disclosing or passing on fees, commissions and other remuneration or financial benefits received by financial service providers from third parties in connection with the provision of financial services, except where waived.

Furthermore, the entry into force of FinSA and the revised CISA necessitated changes to the self-regulation material published by the Asset Management Association Switzerland (AMAS). For example, AMAS has updated the code of conduct, the guidelines for real estate funds and the model distribution agreement, with the changes or revisions having entered into force on 1 January 2022.

Fund Distribution as a Financial Service

From a fund perspective, many circumstances of a former fund distribution under CISA are deemed to be a “financial service” pursuant to FinSA. The terms “purchase” and “sale” of financial instruments pursuant to FinSA go beyond circumstances in which there is an effective purchase or sale of a financial instrument. The new regulatory concept has a broad definition and also includes any related activity, such as any other action that specifically targets the purchase or sale of a financial instrument.

To be characterised as a financial service, contact with an “end investor” is a prerequisite. The provision of information on financial instruments to supervised financial intermediaries is generally not regarded as a financial service under the new law.

Whether roadshows are considered as a financial service depends on the specific circumstances. Given that an activity is only deemed to constitute a financial service if potential end investors are addressed directly (ie, specifically targeting the acquisition or disposal of a specific financial instrument by a client), in many cases roadshows will not be characterised as a financial service in the sense of FinSA and its implementing ordinance FinSO. In certain cases, however, it cannot be excluded that roadshows will constitute an offer or at least an advertisement in the sense of FinSA/FinSO.

Consequences

If the offer of units in a collective investment scheme is made to professional and/or institutional clients only, the foreign collective investment scheme no longer needs to appoint a Swiss representative and paying agent. However, this exemption does not cover high net worth retail clients and private investment structures created for them that have declared that they wish to be treated as professional clients in the sense of FinSA, as clients that opt out do not qualify as qualified investors per se. If they are being approached as part of the offering, it is still necessary to appoint a Swiss representative and paying agent.

Offer Versus Financial Service

Pursuant to FinSA, an offer is “any invitation to acquire a financial instrument that contains sufficient information on the terms of the offer and the financial instrument itself”. According to FinSO, it must be “customarily intended to draw attention to a certain financial instrument and to sell it”.

Certain scenarios do not constitute an offer in the sense of FinSA. Besides the clarification with respect to making factual information available and the mention by name of certain financial instruments, the most important clarification is the new specification in FinSO that making information available at the specific request or initiative of the client without prior advertisement does not constitute an offer.

Unlike the term “financial service”, which triggers point-of-sale-related duties including conduct and organisational rules and the requirement for registration in the register for advisers, the characterisation as an offer is mainly relevant for the requirement to publish a prospectus and a KID, and with respect to fund-specific duties. Most importantly, a foreign collective investment scheme only needs approval if it is offered to non-qualified investors in the meaning of CISA. The same applies essentially with respect to the requirement for a representative and paying agent when a financial product is to be offered to investors other than qualified investors per se.

Open-ended Swiss AIFs can generally be marketed to all types of investors, but it is permitted to restrict them to qualified investors only.

Closed-ended Swiss LPs and unregulated investment companies can only be marketed to qualified investors, regardless of their investment strategy. However, the shares of an investment company that are listed on a Swiss exchange can be made available to non-qualified investors without triggering a licence obligation.

For further details, see 2.3.6 Rules Concerning Marketing of Alternative Funds.

No authorisation or notification is required by FINMA prior to the marketing of alternative funds taking place.

There are no ongoing requirements for firms that have marketed an alternative fund in Switzerland.

In order to protect unsophisticated investors, many Swiss and foreign funds are limited to qualified investors. Pursuant to CISA, qualified investors include professional and institutional clients pursuant to FinSA. Qualified investors in the sense of CISA also include retail clients for whom a financial intermediary in accordance with FinSA or a foreign financial intermediary that is subject to equivalent prudential supervision provides portfolio management or investment advice in accordance with FinSA within the scope of a permanent portfolio management or investment advisory relationship, provided they have not declared that they do not wish to be treated as such (together, QI CISA).

Specifically, QI CISA include the following:

• financial intermediaries as defined in the Banking Act, FinIA and CISA;
• insurance companies as defined in the Insurance Act;
• foreign clients subject to prudential supervision as per the two preceding points;
• central banks;
• public entities with professional treasury operations;
• occupational pension schemes with professional treasury operations and other occupational pension institutions providing professional treasury operations;
• companies with professional treasury operations;
• private investment structures with professional treasury operations created for high net worth retail clients;
• national and supranational public entities with professional treasury operations;
• large companies exceeding two of the following parameters:
1. a balance sheet total of CHF20 million;
2. a turnover of CHF40 million; or
3. equity of CHF2 million;
• high net worth retail clients and private investment structures created for them that have declared that they wish to be treated as professional clients in the sense of FinSA (opting out); and
• Swiss and foreign collective investment schemes and their management companies that are not already deemed to be institutional clients within the meaning of Article 4 paragraph 3 lit. a or c of FinSA in conjunction with Article 4 paragraph 4 of FinSA that have declared that they wish to be treated as institutional clients.

QI CISA under the first four categories above and national and supranational public entities with professional treasury operations qualify as “institutional clients” in the sense of FinSA.

Collaboration with FINMA is considered to be positive and helpful, including in connection with new technologies. The authority is also generally willing to discuss regulatory questions and projects on an informal basis. In addition, licensing proceedings now take less time than in the past.

The majority of Swiss retail funds are open-ended and can take the form of either FCPs or SICAVs. The following asset classes are suitable for retail investors:

• securities funds (Swiss equivalent to the European UCITS);
• real estate funds; and
• other funds for traditional investments.

Although closed-ended structures such as SICAFs can be used for retail funds, no such vehicle has been registered in Switzerland since CISA was introduced in 2007.

For further information on the fund structures available in Switzerland, please see 2.1.1 Fund Structures.

Different market participants can act as investment managers for these funds. The fund manager for an FCP must be a FINMA-licensed Swiss fund management company in order to obtain FINMA approval. Nevertheless, the fund management company can delegate the investment management to a licensed investment manager of collective assets if this is deemed to be in the interest of the investors.

Please see 2.1.2 Common Process for Setting Up Investment Funds for all types of funds except the Swiss LP, which is not available to retail investors.

Investors are only liable for their investment in a Swiss open-ended fund, including FCPs and SICAVs.

The Swiss LP is not available to retail investors. The shares of a SICAF are those of a typical corporation, so investors are only liable for full payment of their investment.

Prospectus Requirements

Please see 2.1.4 Disclosure Requirements, which applies to both AIFs and retail funds.

Reporting Requirements

Further to the reporting requirements outlined under 2.1.4 Disclosure Requirements, foreign retail funds (UCITS) approved by FINMA are subject to a number of reporting obligations, which are the responsibility of the Swiss representative. Ordinary amendments to the fund’s documents must be reported to FINMA and, if material, must be published in Switzerland within 30 days of the relevant changes becoming effective in the home jurisdiction. For certain corporate actions, specific reporting obligations must be met prior to the effective action.

Swiss retail funds are mainly established for and purchased by local investors.

Please see 2.1.1 Fund Structures for Swiss-domiciled fund structures.

There are two forms of regulated Swiss open-ended collective investment schemes: FCPs and SICAVs. Both are subject to the same investment rules, and are divided into categories based on their investment strategy.

The category typically used for retail investors is securities funds (the Swiss equivalent to UCITS funds), which offer a conservative investment strategy. Real estate funds can also be structured as FCPs and SICAVs, which are open to retail investors. Finally, open-ended funds in the category of “other funds for traditional investments” are considered to follow strategies that present risks comparable to those of the other retail funds.

Anyone can invest in retail funds in Switzerland; there are no restrictions.

Securities funds are open-ended collective schemes that invest their assets in securities and comply with the laws of the European Union. They may invest in transferable securities issued on a large scale and in non-securitised rights with the same purpose traded on a stock exchange or on another regulated market. Permissible investments include securities, derivatives, shares of collective investment schemes, money market instruments and short-term deposits. However, precious metals, precious metal certificates, commodities or commodity certificates are prohibited. Short selling is not permitted. Admissible investment techniques include, with limitations, securities lending, repurchase agreements, credit up to 10% of the net assets, and the pledging and transferring as security of up to 25% of net assets.

Real estate funds may invest, in particular, in real estate, real estate companies, interests in real estate funds and real estate assets abroad. The use of derivatives is permissible, subject to limitations. As security for loans, real estate funds may not encumber their real assets on average for an amount exceeding one-third of their market value.

Please see 2.3.2 Requirements for Non-local Service Providers.

Swiss funds can only be managed by a Swiss fund management company or an authorised Swiss fund in corporate form.

Please see 2.3.4 Regulatory Approval Process.

See 2.3.5 Rules Concerning Pre-marketing of Alternative Funds.

Registration as a client adviser and affiliation with an ombudsman may be required for the marketing of retail funds. Please see 2.3.6 Rules Concerning Marketing of Alternative Funds for further details.

All Swiss funds (except Swiss LPs) and investment companies can be marketed to anyone, unless they are specifically restricted to qualified investors in the fund documentation. Foreign UCITS funds approved by FINMA may also be offered to all investors.

For Swiss retail FCPs and SICAVs, advertising does not trigger any authorisation or specific obligation under CISA, nor does it trigger prospectus requirements (as long as the offering threshold is not reached) or any other regulatory obligation under FinSA. Persons responsible for the advertising must therefore only:

• clearly indicate that the marketing material is for advertising purposes; and
• mention the prospectus and KID and the place where these documents can be obtained by the retail investors, if they are already available.

Unlike advertising Swiss retail FCPs and SICAVs, advertising foreign retail funds triggers the marketing authorisation obligations under CISA. Those marketing foreign open-ended retail funds must publish a KID for retail investors under FinSA. If the offering of fund units also constitutes the provision of a financial service, the responsible person(s) or entity will qualify as a (foreign) financial service provider and, as such, can only provide the services towards Swiss-based investors subject to FinSA and the relevant regulatory obligations.

There are no ongoing requirements for firms that have marketed a retail fund in Switzerland.

Swiss retail investors can only invest in Swiss open-ended products that are not restricted to qualified investors; they may not invest in Swiss LPs. They may only invest in foreign funds established as UCITS and approved by FINMA for marketing in Switzerland.

An open-ended Swiss fund structured as an “other fund for alternative investments” must include a written warning regarding the risks involved in the investment on the front page of the prospectus.

Please see 2.3.11 Approach of the Regulator.