Swiss Asset Management License

Swiss Financial Market Authority (FINMA for short) has set a cost-efficient, streamlined mechanism for licensing asset managers. Hence, a company can be authorized to carry out portfolio management by a local non-profit and non-governmental organization – “Association Romande des Intermédiaires Financiers” (further mentioned as ARIF) which operates on behalf of FINMA. Once obtaining membership in ARIF, the licensed Swiss asset manager may execute portfolio management activities both locally and abroad. Read on to find out the core aspects of the Swiss asset management license and the advantages of being licensed.

Overview of FINMA supervisory remit

As a part of its supervisory obligations, FINMA controls whether the FinIA and CISA licensees comply with the applicable legit, statutory, and regulatory rules. The list of categories that fall under the licensing requirements includes the following ones:

• Mutual assets managers;
• Fund management firms;
• Investment firms with variable or fixed capital;
• Limited partnerships for collective investment;
• Custodians for mutual funds;
• Agents of foreign mutual funds.

FINMA supervises asset managers in conjunction with supervisory bodies – self-regulatory organizations (SRO). Generally, 11 SROs in Switzerland frame the due diligence requirements under the AML Act in the form of regulations and check whether affiliated financial agents adhere to them. Hence, a legal entity can apply for authorization to carry out asset management to a local SRO – “Association Romande des Intermédiaires Financiers” that governs its membership and the registration of asset management.

 Overview of ARIF

ARIF – is a non-profit organization of a public utility that started supervision of independent asset managers in 2009 after the approval of FINMA. This authority issues a Certificate of Membership which would give a permit to an applicant to execute portfolio management activities both within and outside Swiss jurisdiction. To obtain a Swiss asset management license and become a member of ARIF, an applicant must satisfy the number of regulatory requirements, provided below.

General information regarding the Swiss Asset Management License

• An applicant must establish a Swiss company with a minimum contributed capital of not less than 20,000 CHF (approximately 18,000 EUR).
• In terms of the company structure and staff, there must be appointed at least one director of Swiss nationality and at least one shareholder – can be either a legal entity or natural person, with no nationality restrictions. The shareholders’ and directors’ data is publicly accessible.
• As for financial obligations, the average tax rate is 12% – (exact rates contingent on the corporate system of a company, model of company, and location of the company as each canton has its taxation rates).
• Accounting and audit requirements necessitate submitting financial statements, and annual reports and executing regular audits (subject to the size of the business).
• A physical office must be registered and a secretary must be appointed.
• All employees who will carry out portfolio management are required to have an adequate level of knowledge and expertise evidenced by detailed CVs and proof of education.

The Swiss Asset Manager Registration Package

Generally, an applicant must prepare and submit the following documents:

• Business plan;
• Financial projections;
• Personal financial statements for owners;
• Application with Swiss ARIF/SRO;
• Identification and engagement of auditor and local director;
• AML/KYC and related policies and procedures;
• Client agreements and mandatory disclosures;
• Opening of bank accounts and prime broker trading accounts.

The application for a Swiss asset management license is processed within 3 months.

Benefits of getting licensed

Once a Swiss Asset management license is acquired, its holder obtains access to the following benefits:

• Operation in respectful and business-friendly jurisdiction;
• Financial stability and transparency;
• Lenient tax regime: low taxation rates based on a clear-cantonal and federal financial system. By far, Switzerland has the lowest value-added tax rate in all of Europe. The regular value-added tax (VAT) is 8%.
• Concentrated network of corporation and banks;
• Business friendly eco-system;
• Stable currency: franc is among the strongest and most stable currencies;
• Double taxation treaties with about 60 countries;
• Concentration on innovative technologies.