Thousands of Swiss asset management firms are, or could be, breaching rules in Switzerland designed to mirror EU investment directives covering distribution, it is claimed.
The claim is from Managing Partners Limited (MPL), an alternative fund management company that has launched a service to help Swiss asset managers distribute funds within the new guidelines of Finma, the country’s regulator.
The rules are set out under Switzerland’s Collective Investment Scheme Act and Collective Investment Scheme Ordinance, and they mirror the Alternative Investment Fund Managers Directive and the Markets in Financial Instruments Directive in the EU.
MPL says the rules require a “stellar leap” in compliance capacity for many of the country’s 5,000 independent asset managers, which have been subjected to little more than money laundering regulations in the past.
The firm estimates that it will require a minimum of €1 million a year for each independent asset manager to become registered independently and licensed by Finma under the rules because of increased minimum capital requirements and additional staffing and compliance costs.
MPL says it can help Swiss and foreign managers to obtain the required status to distribute their funds to qualified investors in Switzerland.
Jeremy Leach, chief executive officer, MPL, says: “Whilst the Swiss should take significant pride in the fact that that such a high degree of ethics has negated the need for a radical overhaul of Swiss financial services practices, the European Union Rules have forced the issue and if the Swiss financial services industry wishes to align itself with Europe, then these regulatory changes are inevitable.
“I envisage that the scale of disruption being caused will be similar to that created in the UK in 1988 as a result of the United Kingdom Financial Services Act.”
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