Types of Investment Funds in Switzerland
Updated on Tuesday 13th June 2017
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Switzerland is an important financial center, mainly represented by the distribution of Swiss and foreign investment collective schemes. Foreign investors interested in how to open an investment fund in Switzerland should know that, traditionally speaking, the distribution of foreign vehicles is divided between the distribution of retail investors and qualified investors.
Open-ended investment funds in Switzerland
Both local and foreign funds in Switzerland can be registered as open-ended or closed-ended structures. The investment market for open-ended investment funds is regulated by the Collective Investment Schemes Act (CISA).
Investors interested in the procedure on how to open a fund in Switzerland will also need to follow the regulations applicable under the following regulations:
• FINMA Circular 2013/9 on the Distribution of Collective Investment Schemes;
• Guideline on the Swiss Bankers’ Association on the Duty to Keep Documentary Records.
FINMA refers to the Swiss Financial Market Supervisory Authority, the main regulatory institution addressed to investment funds in Switzerland. The FINMA Circular provides regulations for the participants who are performing distributions activities in this country.
An open-ended vehicle in Switzerland designates a type of fund in which the investors are not imposed with any restrictions on the amount of shares that can be issued within the respective fund.
Closed-ended funds in Switzerland
Another manner through which foreign investors can set up their investment strategies in Switzerland refers to closed-ended funds, which are regulated by the same rules of law applicable to open-ended vehicles. However, in a closed-ended vehicle, the investors will be allowed to issue a specific amount of shares. In a closed-ended fund, the investors will pool a fixed amount of capital through an initial public offering.
Other types of investment vehicles in Switzerland
Foreign investors may set up a wide range of vehicles when investing in Switzerland, such as:
• equity funds;
• money market funds;
• bond funds;
• strategy funds;
• real estate funds.
At the same time, businessmen may also set up a hedge fund startup, following the regulations applicable under the Federal Act on Collective Investment Schemes.
Please contact our team of affiliates in Switzerland for more details on the Swiss investment vehicles that can be registered by foreign investors.