AIFM Directive discriminates against non-EU managers,
says Swiss report
Industry seeks to negotiate reciprocity with
Switzerland's Federal Council has released a report, (16
December), which notes that the Alternative Investment Fund Managers (AIFM)
Directive (http://tinyurl.com/mkf36v) as currently proposed
discriminates against non-EU managers, and expressing the concern
that the directive would see fund managers leaving Switzerland with
repercussions for the Swiss economy.
The broad-ranging report (http://tinyurl.com/yjtxcmb) on
Switzerland's financial market policy notes that while Swiss
banks are finding it "increasingly difficult or
impossible" to offer wealth management services abroad from
Switzerland, insurance companies, asset managers and funds
providers are also encountering market-entry problems.
With regard the draft AIFM directive it argues: "If the
rules in this directive are actually adopted it threatens to
discriminate against non-member countries such as Switzerland.
Specifically, this directive states that asset management cannot be
delegated to managers outside of the EU, as their supervisory
regulations are not recognised as being equivalent by the relevant
EU bodies," and notes that the directive proposed only
envisages recognition of non-members' regulations after a
period of three years after the directive comes into effect, which,
it says, "would bring a stop, at least temporarily, to all
EU-registered funds that are administered in Switzerland."
The report adds that Switzerland is looking at a number of ways
of ensuring continued market access, both through bilateral
free-trade agreements and at multilateral (World Trade
Organisation, and OECD) level, but that in relation to the European
Union, "given the ongoing deepening of the Single European
Market...alternative measures will have to be verified at a
regulatory level to ensure the broadest possible market access
conditions," i.e. that it would need to negotiate with the EU
in order that the anticipated discriminations did not occur.
In a response the Swiss Funds Association, (https://www.sfa.ch/)
which assisted the Federal Council in drawing up the report, said
that it took into account "the core demands of the
industry". With regard to the market access issue, it said it
was "crucial for Switzerland to negotiate the necessary
reciprocity and to secure freedom of movement with the EU in the
area of collective investment schemes [i.e. an EU passport]",
and that an "EU passport" should be available for:
Fund management companies and asset managers of collective
Swiss (EU- compatible) securities funds pursuant to the
Swiss-domiciled securities funds pursuant to the CISA
Swiss-domiciled asset managers of alternative investment
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The implementation of the mandatory exchange of initial and
variation margin for non-cleared OTC derivative trades in the EU
commenced on 4 February for financial counterparties with the
largest derivatives portfolios.
Nevertheless, a RAIF's investment policy is subject to certain risk diversification requirements laid down by the CSSF.
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