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Self-Regulation & Model documents

Self-Regulation

Background

Three reasons prompted the SFAMA to launch its self-regulation initiative:

  • The Collective Investment Schemes Act (see 'Regulation & Taxes') is designed as a framework law, and although the ordinances offer more precise definitions, there is still intentionally considerable room for interpretation with regard to self-regulation. Self-regulation guarantees uniform implementation and thus makes a significant contribution in respect of investor protection and legal security for the fund industry.
  • Collective investment schemes have become more popular and have enjoyed rapid growth. The range of products on offer has increased sharply, and new distribution channels have emerged. In addition to this, the Collective Investment Schemes Act is no longer a law purely focused on products, and instead goes further with regulations on the activities of certain asset managers. The SFAMA also wants to make its contribution to self-regulation in this regard.
  • As key products for banks, insurers and independent asset managers, collective investment schemes make a significant contribution to the good standing of the Swiss financial center as a whole. One of the SFAMA?s primary tasks is to ensure that the integrity and reputation of the Swiss fund industry are maintained in the future. Self-regulation underscores this intention.

Objectives

Self-regulation has the following aims:

  • to maintain and promote the standing of the Swiss fund industry in Switzerland and abroad,
  • to ensure that the products and services offered on the Swiss fund market meet high quality standards, and
  • to provide for the greatest possible transparency in respect of the collective investment schemes offered on the Swiss market.

Clients who buy collective investment schemes that have been approved in Switzerland should be able to rely on these being of high quality, and offered in a professional and transparent manner.

Recognition as minimum standard

The supervisory authority has recognized the SFAMA's self-regulation regime as a minimum standard. Self-regulation applies differently to the various licensees pursuant to the Collective Investment Schemes Act.

The supervisory authority has compliance with the provisions applicable for the affected institutions checked by their auditors.

Self-Regulation, model documents

The SFAMA's self-regulation measures comprise

  • the Code of Conduct for the Swiss Fund Industry, which is actually the core component of the self-regulation regime, as well as 
  • supplementary guidelines relating to clearly defined individual functions, and
  • model documents for the management and distribution of collective investment schemes.

In addition to this, within the area of voluntary self-regulation, the SFAMA issues specialist recommendations and information as well as guides and checklists.

Model documents

The SFAMA provides the fund industry with a wide range of model documents for collective investment schemes.

The Swiss Financial Market Supervisory Authority FINMA has acknowledged and accepted the model documents. The Swiss Federal Tax Administration (FTA) subsequently approved the proposed wording in respect of the relevant tax regulations.

These texts are proposed wordings. Every fund management company is free to choose more detailed wordings or even different formulations. However, with a view to ensuring the greatest possible efficiency, the FINMA and the SFAMA recommend using the model texts insofar as is possible.

Summary

The SFAMA's aim is for the self-regulation measures to ensure fair representation of investors' interests, promote the use of internationally recognized standards, and eliminate unprofessional practices in the offering and distribution of collective investment schemes.

The SFAMA actively supports its members in implementing the self-regulation measures.