Gibraltar: Gibraltar Equipped To Assist As Swiss Fund Laws Are Tightened

Last Updated: 17 August 2012
Article by Peter Young and Anthony Jimenez

Peter Young & Anthony Jimenez report on behalf of the Gibraltar Funds and Investment Association (GFIA).

Gibraltar's business ties with Switzerland were celebrated last year when the Gibraltar Finance Centre invited guests to join members of Gibraltar's commercial and finance community at special "Gibraltar Day" conferences in Zurich and Geneva. The guest speaker at both events was the then Chief Minister of Gibraltar, the Hon. Peter Caruana QC, who, during his speeches, emphasised the benefits and solutions that Gibraltar can offer Swiss businesses. One Gibraltar industry which has seen substantial utilisation by the Swiss in recent years is Gibraltar's booming funds sector; Gibraltar's emergence as a funds domicile jurisdiction began in 2005 when it unveiled its Experienced Investor Fund (EIF) product. The EIF has since proved a popular vehicle amongst Swiss managers for its robustness and flexibility. This year, Gibraltar's EIF regime was updated to allow for foreign administration in certain circumstances and expansion of the definition of "experienced investors" to include investors who invest a minimum of EUR 50,000 provided they are professionally advised.

In February 2012, members of the Gibraltar Funds and Investments Association (GFIA) attended the Fonds 2012 exhibition at Kongresshaus, Zurich for the second year in succession. The main topic amongst attendees was the Swiss response to international pressure to amend its Collective Investment Schemes Act (CISA) in light of the evolving global legislative framework governing funds and fund management. The consultation period for the draft CISA (D-CISA) took place between July 2011 and October 2011 and is currently with the Swiss Parliament for review. Implementation is planned for early 2013.

Regulation in Switzerland

Switzerland, under its CISA, currently operates a "light touch" regulatory system for Swiss managers managing non-Swiss domiciled funds. Only managers of Swiss collective investment schemes are currently subject to mandatory regulation by the Swiss Financial Market Supervisory Authority (FINMA). However, Swiss managers of foreign collective investment schemes may, under certain conditions, submit to voluntary supervision by self-regulatory organizations (SRO) which are in turn subject to regulation by FINMA. The main role of a SRO is to draft regulations governing the obligations under the Swiss anti-money laundering act and to ensure that institutions registered with them comply with these obligations.

However, changes in how fund managers are regulated globally are causing Switzerland to restructure its current regime and embrace new rules with regards the management, safekeeping and distribution of collective investment schemes. The aim of the D-CISA is to bring the Swiss fund management arena in line with new international regulatory standards. At the forefront of changes to global regulation of fund management is the introduction the Alternative Investment Managers Directive (AIFMD) in Europe. AIFMD, which came into force on 21st July 2011 and is due to be implemented by EU member states by July 2013, provides that managers of alternative investment funds (AIFs) will be subject to mandatory regulation, subject to certain exceptions (such as those relating to the value of assets under management). After September 2015 under AIFMD, the management of AIFs may only be delegated to alternative investment fund managers (AIFMs) domiciled in third-party countries, such as Switzerland, if these AIFMs are subject to regulation equivalent to that under AIFMD. The regulatory authority of the third-party country responsible for the AIFM must also cooperate with the regulatory authority monitoring the AIF. Under the current provisions of the CISA, Swiss fund managers would most likely not meet these requirements. If the law in Switzerland is not amended, Swiss fund managers may not be able to manage certain collective investment schemes domiciled in Europe.

Proposed Changes under D-CISA

The D-CISA proposes that all Swiss fund managers, regardless of the domicile of the funds they manage, be subject to licencing and regulation by FINMA. The D-CISA did not initially offer any opt-out or exclusion provisions for smaller managers, even though AIFMD allows exemptions for fund managers managing less than EUR 500m (for closed ended funds with no leverage) or EUR 100m (for open ended funds or those which use leverage). However, due to some resistance on this point by the Swiss fund industry, the DCISA was amended to allow for exemptions in certain circumstances, amongst them a partial exemption of smaller fund managers (the definition of which is drawn from AIFMD) of collective investment schemes at the discretion of the Federal Council.

Other changes under the D-CISA

Amongst other matters, the D-CISA also introduces new requirements relating to safekeeping for Swiss custodian banks and also relating to the distribution of funds within or from Switzerland. It is understood that all distributors of funds in Switzerland will need to be authorised, which includes distributors of funds to "qualified investors".

How can Gibraltar help?

For financial services purposes, Gibraltar is fully within the European Union. We envisage two ways in which Gibraltar can assist Swiss fund managers:

Firstly, larger Swiss fund managers, who will have to comply with the D-CISA and be regulated by FINMA, will have significant regulatory constraints at least equivalent to those which are currently imposed by Markets in Financial Instruments Directive (MiFID) or will be imposed under AIFMD. However, a MiFID license (or its mutually exclusive cousin, an AIFM license) will be passportable (on a regulator-to-regulator notification basis) across EU member states unlike the Swiss equivalent. A Gibraltar licensee will automatically be able to provide cross border services to AIFs (if an AIFM) or as currently under MiFID, by the simple checking of a box. There are a number of services providers already in Gibraltar, who are accustomed to providing both the technical services and personnel in Gibraltar for Swiss based managers to establish a MiFID licensed manager in Gibraltar. Gibraltar is particularly attractive because of the very low Gibraltar corporate tax rate (10% of accounting profit, subject to all the usual deductions) for business that are physically based in Gibraltar.

Secondly, Gibraltar will be interesting to Swiss fund managers with assets under management at the smaller end of the scale, that are exempt from the new licencing rules under D-CISA but who also cannot comply with AIFMD. The exemption rules in AIFMD should allow them to manage European funds (whether as the AIFM or otherwise) provided the funds they manage have less than EUR 100M (or EUR 500M, as the case may be) under management. In the two largest alternative funds jurisdictions, Luxembourg and Ireland, even prior to the implementation of AIFMD, investment managers based outside those countries are coming under increasing scrutiny by the Luxembourg and Irish regulators where it is proposed they manage the Luxembourg or Irish EIF equivalent. The Gibraltar EIF regime simply requires the investment manager to be licensed in the place where it is based. In addition, at present there is no requirement to have a Gibraltar custodian bank, whereas the Luxembourg and Irish equivalents require a local custodian. We anticipate that these rules are unlikely to be altered in Gibraltar by the introduction of AIFMD, where the EIF or its manager are not required to comply with AIFMD, because the value of assets under management are low enough to fall within the exemption.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions