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Enacted two years ago to enhance the competitiveness of the
Swiss funds industry, the Swiss Collective Investment Schemes Act
(CISA) has been responsible for a large rise in the number of
qualified investor funds, according to the Swiss Funds Association
(SFA). Qualified Investor Funds, which are restricted to
individuals with at least CHF2 million under management, are mainly
used by hedge funds. According to SFA data, between December 2006
and December 2008, the number of qualified investor funds rose by
40%, to 520.
CISA also introduced new legal structures aimed at attracting hedge
funds, including investment funds with variable capital (SICAV) and
limited partnerships (LP). According to the SFA, 16 SICAVs have
been launched since the legislation, and five LPs.
Following implementation of CISA, the Swiss financial services
sector has launched a number of initiatives with the aim of
boosting Switzerland's reputation as a global financial
services centre. Last September, a joint task force led by the
Swiss Financial Centre Dialogue Steering Committee approved a
series of measures aimed at attracting hedge funds including
clarification of the tax regime for hedge funds and simplification
of the authorisation process required by the Swiss Regulator (Swiss
Federal Banking Commission) for hedge fund managers. A number of
Swiss cantons have been aggressively targeting hedge fund managers
since the change in the UK non-domicile tax regime last year, which
made London a less attractive location for non-UK managers.
Switzerland has long been a leader in the funds of hedge funds
sector, with five of the seven largest funds of hedge funds
domiciled in the country and a worldwide market share of 31%.
However, until recently it has failed to attract significant
numbers of single hedge funds.
According to the SFA, a majority of Swiss hedge funds posted
negative performance in 2008 - the first year with a net outflow of
assets since 1998.
For more information on CISA and the Financial Services Masterplan,
click here.
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The Risk and Regulation Monthly provides a summary of the key International, European and UK regulatory developments and pertinent regulatory activity affecting the Financial Services industry.
Existing funds which no longer invest after July 22, 2013 are not required to comply with the provisions of the KAGB, even if the manager of such funds also manages funds which still make investments.
The purpose of this investment memorandum is to provide an overview of the investment vehicles (i.e. regulated, lightly regulated and unregulated) that Luxembourg offers to (foreign) entrepreneurs and managers.
The FSA has been in discussions with the banks with regard to them providing appropriate redress for affected customers in relation to the mis-selling of payment protection insurance.
The Court of Justice of the European Union has ruled that VAT on investment management fees paid by the trustees of a UK defined benefit pension scheme is irrecoverable under a VAT exemption for special investment contained in two EU Directives.
The draft legislation transposing the European Union’s Alternative Investment Fund Managers Directive into Luxembourg law was submitted to the grand duchy’s Chamber of Deputies by finance minister Luc Frieden on August 24.
Directive 2011/61/EU on Alternative Investment Fund Managers comes into force on 22 July 2013, and aims to provide common requirements across all EU States for the management or sale of Alternative Investment Funds by Alternative Investment Fund Managers within the EU.
A summary of the most recent financial regulatory developments.
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