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Swiss Regulations and Investment: A New Approach for Qualified Investors

  • By The Swiss Times
  • 31 January 2024

Swiss Regulations and Investment see a transformative update with the advent of L-QIFs, marking a new chapter in the Swiss investment landscape.

Swiss Regulations and Investment: A New Approach for Qualified Investors

As announced by the Federal Council today

On January 31, 2024, the Swiss Federal Council implemented significant amendments to the Collective Investment Schemes Act (CISA) and Collective Investment Schemes Ordinance (CISO), effective March 1, 2024, introducing the Limited Qualified Investor Funds (L-QIFs).

This new investment fund category, stemming from a Federal Assembly decree in December 2021, is designed to enhance Switzerland’s attractiveness as a leading investment hub. Offering a vehicle for qualified investors that bypasses the conventional licensing and supervisory requirements of the Swiss Financial Market Supervisory Authority (FINMA).

While the L-QIFs are aimed at facilitating investment processes and fostering innovation within the financial sector. Their exemption from standard FINMA oversight raises concerns about the regulatory environment and investor protection. L-QIF funds themselves are not subject to the same rigorous standards as other investment vehicles, leading to a less regulated market space.

These legislative changes also involve updates to the CISO and related ordinances, such as the Financial Institutions Ordinance (FinIO). The move towards a more deregulated framework, particularly for products like L-QIFs, warrants caution.

While Switzerland seeks to maintain its competitive edge by adapting to market evolutions and global benchmarks, the introduction of deregulated financial products like L-QIFs could introduce risks associated with lesser regulatory oversight, emphasising the need for a critical assessment of these reforms.

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