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Art. 70 Permitted investments
(Art. 54 para. 1 and 2 CISA)
1The following investments are permitted:
- a.
- securities in accordance with Article 71;
- b.
- derivative financial instruments in accordance with Article 72;
- c.
- units in collective investment schemes which comply with the requirements specified in Article 73;
- d.
- money market instruments as specified in Article 74;
- e.
- sight or time deposits with a term to maturity not exceeding twelve months held with banks domiciled in Switzerland or in a member state of the European Union or in another country provided that the bank is subject to supervision in that country which is equivalent to the standard of supervision in Switzerland.
2The following are not permitted:
- a.
- investments in precious metals or precious metals certificates, commodities or commodity certificates;
- b.
- short-selling of investments in accordance with paragraph 1 letters a, b, c and d.
3Investments in assets other than those named in paragraph 1 may not exceed 10 percent of the fund's total assets.
4...1
1 Amended by Annex 1 No II 9 of the Financial Institutions Ordinance of 6 Nov. 2019, in force since 1 Jan. 2020 (AS 2019 4633).
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Art. 71 Securities
(Art. 54 CISA)
1Securities are deemed to be equity or debt securities pursuant to Article 54 paragraph 1 of the Act which embody a participation right or claim or the right to acquire such securities and rights by way of subscription or exchange, specifically warrants.
2Investments in securities from new issues are permitted only if the terms of issue provide for their admission to a stock exchange or other regulated market which is open to the public. If one year following purchase they are not yet admitted on the stock exchange or other market open to the public, such securities must be sold within one month.
3FINMA may formalise the permitted investments for a securities fund in accordance with the laws currently in force in the European Communities.1
1 Inserted by No I of the Ordinance of 13 Feb. 2013, in force since 1 March 2013 (AS 2013 607).
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Art. 72 Derivative financial instruments
(Art. 54 and 56 CISA)
1Derivative financial instruments are permitted if:
- a.
- their underlyings are instruments as defined in Article 70 paragraph 1 letters a-d, financial indices, interest rates, exchange rates, loans or currencies;
- b.
- the underlyings are instruments permitted by the fund regulations; and
- c.
- they are traded on a stock exchange or other regulated market open to the public.
2In the case of transactions involving OTC derivatives, the following conditions shall be complied with in addition:
- a.
- The counterparty is a regulated financial intermediary specializing in such transactions.
- b.
- The OTC derivatives are traded daily or may be returned to the issuer at any time. In addition, it is possible for them to be valued in a reliable and trans- parent manner.
3A securities fund's overall exposure associated with derivative financial instruments may not exceed 100 percent of the net assets. The overall exposure may not exceed 200 percent of the fund's total net assets. When taking account of the possibility of temporary borrowing amounting to no more than 10 percent of the net assets (Art. 77 para 2), the overall exposure may not exceed 210 percent of the fund's total net assets.
4Warrants must be treated in the same manner as financial instruments.
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Art. 73 Investments in other collective investment schemes (target funds)
(Art. 54 and 57 para. 1 CISA)
1The fund management company and the SICAV may only invest in target funds if:
- a.
- their documents restrict investments in other target funds for their part to a total of 10 percent;
- b.
- these funds are subject to provisions equivalent to those pertaining to securities funds in respect of the object, organisation, investment policy, investor protection, risk diversification, asset segregation, borrowing, lending, shortselling of securities and money market instruments, issue and redemption of units and content of the semi-annual and annual reports;
- c.
- the target funds are admitted as collective investment schemes in the country of domicile, where they are subject to investor protection which is equivalent to that in Switzerland, and international legal assistance is ensured.
2They may invest a maximum of:
- a.
- 20 percent of the fund's assets in units of the same target fund; and
- b.1
- 30 percent of the fund’s assets in units of target funds that do not meet the relevant directives of the European Union (undertakings for collective investment in transferable securities, UCITS) but are equivalent to these or Swiss securities funds pursuant to Article 53 of the Act.
3In relation to investments in target funds, Articles 78-84 do not apply.
4If, in accordance with the fund regulations, a significant portion of the fund assets may be invested in target funds:
- a.2
- the fund regulations and the prospectus must contain information about the maximum level of management fees to be borne by the investing collective investment scheme itself as well as by the target funds;
- b.
- the annual report must specify the maximum portion of management fees that the investing collective investment scheme and the target funds may each bear.
1 Amended by No I of the Ordinance of 13 Feb. 2013, in force since 1 March 2013 (AS 2013 607). 2 Amended by No I of the Ordinance of 13 Feb. 2013, in force since 1 March 2013 (AS 2013 607).
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Art. 73a Master feeder- structures
(Art. 54 and 57 para. 1 CISA)
1A feeder fund is a collective investment scheme that by way of derogation from Article 73 paragraph 2 letter a invests at least 85 percent of the fund’s assets in units of the same target fund (master fund).
2The master fund is a Swiss collective investment scheme of the same type as the feeder fund but is not itself a feeder fund and does not hold any units in such a fund.
3A feeder fund may invest up to 15 percent of its fund assets in liquid assets (Art. 75) or derivative financial instruments (Art. 72). The derivative financial instruments may only be used for hedging purposes.
4FINMA regulates the details.
1 Inserted by No I of the Ordinance of 13 Feb. 2013, in force since 1 March 2013 (AS 2013 607).
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Art. 74 Money market instruments
(Art. 54 para. 1 CISA)
1The fund management company and the SICAV may acquire money market instruments if these are liquid and can be valued and are traded on a stock exchange or other regulated market that is open to the public.
2Money market instruments that are not traded on a stock exchange or other regulated market that is open to the public may only be acquired if the issue or the issuer is subject to provisions regarding creditor or investor protection and if the money market instruments are issued or guaranteed by:
- a.
- the Swiss National Bank;
- b.
- the central bank of a member state of the European Union;
- c.
- the European Central Bank;
- d.
- the European Union;
- e.
- the European Investment Bank;
- f.
- the Organisation for Economic Cooperation and Development (OECD);
- g.
- another state including its constituent parts;
- h.
- a public international body of which Switzerland or at least one member state of the European Union is a member;
- i.
- a public body;
- j.
- a company whose securities are traded on a stock exchange or other regulated market open to the public;
- k.1
- a bank, securities firm or other institution that is subject to supervision equivalent to that in Switzerland.
1 Amended by Annex 1 No II 9 of the Financial Institutions Ordinance of 6 Nov. 2019, in force since 1 Jan. 2020 (AS 2019 4633).
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Art. 75 Liquid assets
(Art. 54 para. 2 CISA)
Liquid assets comprise bank credit balances and claims arising from repurchase agreements at sight or on demand with maturities of up to twelve months.
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Art. 76 Securities lending and repurchase agreements (repo, reverse repo)
(Art. 55 para. 1 let. a and b CISA)
1Securities lending and repurchase agreements may only be used for the efficient management of the fund's assets. The custodian bank is liable for the proper, efficient settlement of securities lending and repurchase transactions.
2Banks, brokers, insurance institutions and securities clearing organisations may be used as borrowers in the context of securities lending provided they specialise in securities lending and furnish collateral which corresponds to the scope and risk of the proposed transactions. Repurchase transactions may be conducted under the same conditions with the institutions mentioned.
3Securities lending and repurchase transactions are governed by a standardised framework agreement.
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Art. 77 Raising and granting of loans; encumbrance of the fund's assets
(Art. 55 para. 1 let. c and d and para. 2 CISA)
1At the expense of a securities fund:
- a.
- no loans may be granted, nor may any guarantees be concluded;
- b.
- no more than 25 percent of the fund's net assets may be pledged or owner- ship thereof be transferred as collateral.
2Securities funds may borrow the equivalent of up to 10 percent of the net assets on a temporary basis.
3Securities lending and repurchase agreements in the form of reverse repos are not deemed to be lending pursuant to paragraph 1a.
4Repurchase agreements in the form of repos pursuant to paragraph 2 are deemed to be borrowing unless the funds obtained are used as part of an arbitrage transaction for the acquisition of securities of a similar type in connection with a reverse repo.
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Art. 78 Risk diversification in relation to securities and money market instruments
(Art. 57 CISA)
1Including the derivative financial instruments, the fund management company and the SICAV may invest up to 10 percent of the fund's assets in securities or money market instruments of the same issuer.
2The total value of the securities and money market instruments of the issuers in which more than 5 percent of the fund's assets are invested may not exceed 40 percent of the fund's assets. This limit does not apply to sight or time deposits as defined in Article 79 or to transactions in OTC derivatives as defined in Article 80, to which the counterparty is a bank as defined in Article 70 paragraph 1e.
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Art. 79 Risk diversification in relation to sight and time deposits
(Art. 57 CISA)
The fund management company and the SICAV may invest up to 20 percent of the fund's assets in sight and time deposits held with the same bank. Investments in bank deposits (Art. 70 para. 1 let. e) in addition to liquid assets (Art. 75) are both subject to this limit.
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Art. 80 Risk diversification in relation to OTC transactions and derivatives
(Art. 57 CISA)
1The fund management company and the SICAV may invest up to 5 percent of the fund's assets in OTC transactions with the same counterparty.
2Where the counterparty is a bank as defined in Article 70 paragraph 1e, this limit is raised to 10 percent of the fund's assets.
3The derivative financial instruments and claims against counterparties arising from OTC transactions are subject to the regulations on risk diversification as defined in Articles 73 and 78-84. This does not apply to derivatives on indices which comply with the conditions defined in Article 82 paragraph 1 letter b.
4Where the claims arising from OTC transactions are hedged using collateral in the form of liquid assets such claims are not included in the calculation of counterparty risk. FINMA regulates the details of the collateral requirements. In doing so, it shall take account of international standards.1
1 Inserted by No I of the Ordinance of 13 Feb. 2013 (AS 2013 607). Amended by Annex 4 No 1 of the Ordinance of 25 June 2014, in force since 1 Jan. 2015 (AS 2014 2321).
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Art. 81 Overall limits
(Art. 57 CISA)
1Investments, deposits and claims in accordance with Articles 78–80 from the same issuer may not exceed 20 percent of the fund's overall assets.
2Investments and money market instruments in accordance with Article 78 from the same group of companies may not exceed 20 percent of the fund's overall assets.
3The limits defined in Articles 78–80 and 83 paragraph 1 may not be accumulated.
4In the case of umbrella funds, these limits apply to each individual subfund.
5Companies which form a group in accordance with international accounting regulations are deemed to be a single issuer.
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Art. 82 Exceptions for index funds
(Art. 57 CISA)
1The fund management company and the SICAV may invest a maximum of 20 percent of the fund's assets in securities or money market instruments from the same issuer if:
- a.
- the fund regulations provide for the tracking of an index of equity or debt securities which is recognized by FINMA (index funds); and
- b.
- the index is sufficiently diversified, representative of the market to which it relates, and is published in an appropriate manner.
2The limit is increased to 35 percent for any securities or money market instruments from the same issuer where such instruments strongly dominate regulated markets. This exemption only applies in relation to a single issuer.
3The investments defined in this article are not considered when observing the limit of 40 percent defined in Article 78 paragraph 2.
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Art. 83 Exemptions for publicly guaranteed or issued investments
(Art. 57 para. 1 CISA)
1The fund management company and the SICAV may invest up to 35 percent of the fund's assets in securities or money market instruments of the same issuer provided such instruments are issued or guaranteed by:
- a.
- an OECD member country;
- b.
- a public body from the OECD;
- c.
- a public international body of which Switzerland or a member state of the European Union is a member.
2Subject to the approval of FINMA, they may invest up to 100 percent of the fund's assets in securities or money market instruments of the same issuer. In such event the following rules must be observed:
- a.
- the investments are spread across securities or money market instruments from at least six different issues;
- b.
- up to 30 percent of the fund's assets are invested in securities and money market instruments of the same issue;
- c.
- reference is made in the prospectus and in the advertising material to the specific approval of FINMA; the issuers in which more than 35 percent of the fund's assets are invested are also listed therein;
- d.
- the fund regulations include a listing of the issuers in which more than 35 percent of the fund's assets may be invested, together with the corresponding guarantors.
3Provided the protection of investors is not endangered, FINMA grants authorisation.
4The investments defined in this article are not considered when observing the limit of 40 percent defined in Article 78 paragraph 2.
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Art. 84 Limit to the equity interest in a single issuer
(Art. 57 para. 2 CISA)
1Neither the fund management company nor the SICAV may acquire equity securities representing more than 10 percent of the overall voting rights in a company or which would enable it to exert a material influence on the management of an issuing company.
2FINMA may grant an exception provided the fund management company or the SICAV provides evidence that it does not exert a material influence.
3The fund management company and the SICAV may acquire the following on behalf of the fund assets:
- a.
- up to 10 percent of the non-voting equity paper, debt instruments or money market instruments of the same issuer;
- b.
- up to 25 percent of the units in other collective investment schemes which meets the requirements specified in Article 73.
4The limit defined in paragraph 3 does not apply if, at the time of acquisition, the gross amount of the debt instruments, the money market instruments or the units in other collective investment schemes cannot be calculated.
5The limits defined in paragraphs 1 and 3 do not apply to securities and money market instruments which are issued or guaranteed by a country or public body belonging to the OECD or by international public bodies of which Switzerland or a member state of the European Union is a member.
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Art. 85 Specific obligation to inform in the prospectus
(Art. 75 CISA)
1The prospectus must provide information about the categories of investment instruments in which the fund is invested and whether transactions involving derivative financial instruments are conducted. Where transactions involving derivative financial instruments are conducted, an explanation must be given as to whether such transactions are conducted as part of the investment strategy or for the hedging of investment positions, and how the use of such instruments affects the risk profile of the securities fund.
2Where the fund management company or the SICAV are permitted to invest the fund's assets primarily in investments other than those defined in Article 70 paragraph 1 letters a and e, or where they constitute an index fund (Art. 82), specific reference must be made to this fact in the prospectus and in the advertising material.
3Where the net assets of a securities fund exhibit high volatility or a high leverage effect owing to the composition of the investments or the investment techniques applied, specific reference must be made to this fact in the prospectus and in the advertising material.
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