In December 2021, the Federal Council decided to amend the Collective Investment Schemes Act (CISA) and thus introduce the L-QIF.
The L-QIF will not need to be approved by the Swiss Financial Market Supervisory Authority (FINMA) and is not subject to prudential supervision. It is a collective investment scheme available exclusively to qualified investors and it can only be managed by institutions that are supervised by FINMA. The L-QIF will be faster and cheaper to set-up compared to currently available Swiss fund structures and is intended to increase the attractiveness and innovative capacity of Switzerland as a fund center.
Purpose and scope of the amendments
The proposal opened for consultation implements the L-QIF provisions into the CISO. Some of its key features are outlined below.
1. Moderate deregulation
No authorisation, no approval, and no supervision of the product by a regulator.
2. Maintenance of protection of investors
- L-QIFs are exclusively available to qualified investors;
- The product must be administrated by an institution subject to FINMA’s supervision.
3. Not an independent new legal form of a collective investment scheme
L-QIFs have to adopt one of the following legal forms available under the CISA:
- contractual investment fund;
- investment company with variable capital (SICAV); or
- limited partnership for collective investment schemes (KmGK).
4. Possibility for existing funds to change their type of fund
Possibility to convert from an authorised fund to an L-QIF.
Some new advantages
1. Low fees
L-QIFs entail lower costs than current Swiss collective investment schemes.
2. High speed to market
Tight time frame between the conception, the development of an L-QIF and the availability for investors.
3. More flexibility & innovation
No limits or restrictions apply to the content of an L-QIF in order to promote innovation.
4. Domestic solution
Maintains the financial service chain and value creation in Switzerland.
Some unchanged drawbacks
1. Withholding tax of 35%
L-QIFs are subject to withholding tax, as are any other funds subject to this tax under CISA.
2. No EU-pass
No EU-passport for Swiss funds.
Get in touch
If you have any questions on the L-QIF, please do not hesitate to reach out to Judith Raijmakers, Sandra Zysset, or Etienne Anex.