Answer ... With respect to foreign alternative investment funds (AIFs), the licensing requirements depend on the types of investors that are targeted in Switzerland. The offering and advertising of foreign AIFs to retail clients require prior authorisation from the Swiss Financial Market Supervisory Authority (FINMA), which includes the appointment of a Swiss representative and a Swiss paying agent. By contrast, the offering and advertising of foreign AIFs to institutional clients or professional clients do not trigger an obligation to register with FINMA. If foreign AIFs are targeting Swiss high-net-worth individuals and private investment structures created for them without professional treasury operations(including structures such as trusts, family offices and domiciliary companies)with an opt-out declaration, they must appoint a Swiss representative and a Swiss paying agent in Switzerland.

Answer ... Most foreign collective investment schemes approved for offering and advertising in Switzerland are undertakings for collective investment in transferable securities (UCITS). FINMA has standardised the approval process for UCITS in recent years. The application must be filed by the Swiss representative, together with the relevant fund documents for Switzerland.

As FINMA practice requires that a non-UCITS fund meet equivalent criteria to those which apply to Swiss AIFs, there have been very few registrations of non-UCITS funds recently (eg, Hong Kong-based funds, due to the cooperation agreement between FINMA and the Hong Kong Securities and Futures Commission). Other existing AIFs are grandfathered. In order to obtain authorisation, the following criteria must be met:

• A Swiss representative and a Swiss paying agent must be appointed;
• The designation of the foreign collective investment scheme must not give reason for deception or confusion;
• FINMA and the foreign supervisory authority must have entered into an agreement on the cooperation and exchange of information regarding the distribution of the AIF;
• The regulatory framework governing the organisation, investor rights and investment policy of the fund management company or fund company, as well as of the custodian, must be equivalent to the provisions of the Collective Investment Schemes Act; and
• The collective investment scheme, the fund management company or fund company, the asset manager and the custodian must be subject to public supervision intended to protect investors.

Answer ... With regard to the process for obtaining authorisation for AIFs see questions 3.1 and 3.2. In general, the whole set-up and FINMA registration process takes approximately four to eight weeks (mainly depending on the turnaround times of FINMA and the AIF).

With regard to foreign AIFs offered and advertised to Swiss high-net-worth individuals and private investment structures created for them without professional treasury operations(including structures such as trusts, family offices and domiciliary companies)with an opt-out declaration, the whole set-up process takes approximately two to three weeks (depending mainly on the AIF’s turnaround time for commenting on drafted agreements).