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Art. 19 Commerciality
(Art. 3 and 17 FinIA) 1Portfolio managers and trustees are deemed to pursue their activities on a commercial basis and, within the meaning of anti-money laundering legislation, on a professional basis if they: - a.
- thereby generate gross earnings of more than CHF 50,000 per calendar year;
- b.
- establish business relationships with more than 20 contractual partners per calendar year, each of which relationships is not limited to a once-only activity, or they maintain at least 20 such relationships per calendar year; or
- c.
- have unlimited power of disposal over assets belonging to others, which assets exceed CHF 5 million at any given time.
2Activities for schemes and persons in accordance with Article 2 paragraph 2 letters a, b, d and e FinIA are not factored into the assessment of commerciality. 3Paragraphs 1 and 2 do not apply to portfolio managers in accordance with Article 24 paragraph 2 FinIA.
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Art. 20 Additional authorisation
(Art. 6 FinIA) 1Portfolio managers also wishing to act as trustees require additional authorisation for this. 2Trustees also wishing to act as portfolio managers require additional authorisation for this.
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Art. 21 Entitlement to be subject to supervision by a supervisory organisation
(Art. 7 para. 2 FinIA) 1Portfolio managers and trustees are entitled to be subject to supervision by a supervisory organisation if their internal rules and their operational organisation ensure that the supervisory requirements are satisfied. 2A supervisory organisation can make subjection to supervision dependent on portfolio managers and trustees being required to maintain special statutory professional confidentiality.
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Art. 22 Change in facts
(Art. 8 FinIA) 1Portfolio managers and trustees shall notify the supervisory organisation of any changes in the facts on which its authorisation is based. The supervisory organisation shall periodically forward the changes to FINMA. 2If authorisation is required in accordance with Article 8 paragraph 2 FinIA, FINMA will as part of its assessment hear the supervisory organisation.
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Art. 23 Organisation
(Art. 9 FinIA) 1Two authorised signatories must sign jointly. Article 20 paragraph 2 FinIA remains reserved. 2Portfolio managers and trustees must be able to be represented by a person who has their place of residence in Switzerland. This person must be a member of the body responsible for management or of the body responsible for governance, supervision and control in accordance with paragraph 3. Article 20 paragraph 2 FinIA remains reserved. 3With reservation as to Article 20 paragraph 2 FinIA, FINMA may require the portfolio manager or trustee to appoint a body responsible for governance, supervision and control the majority of whose members are not members of the body responsible for management if: - a.
- it has ten or more full-time positions or annual gross earnings of more than CHF 5 million; and
- b.
- the nature and scope of its activities so demand.
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Art. 24 Tasks
(Art. 19 FinIA) 1The portfolio manager shall ensure that the assets entrusted to it for management are held in safekeeping, segregated per client, with a bank pursuant to the BankA13, a securities firm pursuant to the FinIA, a trading facility for distributed ledger technology securities (DLT trading facility) in accordance with the FinMIA14 or other institution that is subject to supervision equivalent to that in Switzerland.15 2It shall manage the assets on the basis of authorisation given in writing or in another form demonstrable via text. The authorisation must be limited to administrative acts. If the portfolio manager is entrusted with the provision of further services which require more far-reaching authorisations, it shall document the basis of these activities. 3Portfolio managers shall take measures to avoid a break-off of contact with clients and to prevent client relationships from becoming dormant. If a business relationship becomes dormant, the portfolio manager shall take suitable steps to ensure that dormant assets are delivered to beneficiaries. 4Paragraph 2 applies by analogy to trustees. Moreover, trustees must, within the framework of the law applicable to the trust: - a.
- act in the best possible interests of beneficiaries and with the required level of skill, care and diligence;
- b.
- take appropriate organisational precautions to avoid conflicts of interest or disadvantages for beneficiaries as a result of conflicts of interest.
5If the rendering of additional services increases the risks to which portfolio managers and trustees are exposed, this must be taken into account within the scope of supervision (Articles 61 and 62 FinIA). 13 SR 952.0 14 SR 958.1 15 Amended by No I 7 of the O of 18 June 2021 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Aug. 2021 (AS 2021 400).
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Art. 25 Qualified managers
(Art. 20 FinIA) 1A qualified manager is deemed to satisfy the requirements for training and professional experience at the time of assuming management duties if she or he can furnish evidence of the following: - a.
- five years of professional experience:
- 1.
- in the case of portfolio managers, in portfolio management for third parties,
- 2.
- in the case of trustees, within the framework of trusts; and
- b.
- training of at least 40 hours:
- 1.
- in the case of portfolio managers, in portfolio management for third parties,
- 2.
- in the case of trustees, within the framework of trusts.
2Where there are legitimate grounds for so doing, FINMA may grant exemptions from these requirements. 3Portfolio managers and trustees shall engage in regular continuing professional development to maintain the skills acquired. 4They shall take the necessary precautions to ensure the continuation of business operations in the event that the qualified manager is prevented from acting or dies. If third parties from outside the company are appointed, the clients must be informed accordingly. In all other respects, Article 14 FinIA shall apply.
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Art. 26 Risk management and internal control
(Art. 9 and 21 FinIA) 1Portfolio managers and trustees shall set out guidelines for the basic principles of risk management and define their risk tolerance. 2Risk management and internal control are not required to be independent of revenue-based activities if the portfolio manager or trustee: - a.
- is a company which has five or fewer full-time positions or annual gross earnings of less than CHF 2 million; and
- b.
- adheres to a non-high-risk business model.
3The thresholds in accordance with paragraph 2 letter a must be achieved in two of three past business years or be provided for in the business planning. 4If the portfolio manager or trustee has a body responsible for governance, supervision and control in accordance with Article 23 paragraph 3 and generates annual gross earnings of more than CHF 10 million, FINMA may also require that internal auditors who are independent of management be appointed where the nature and scope of activity so dictate.
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Art. 27 Minimum capital
(Art. 22 para. 1 FinIA) 1The minimum capital requirements of companies limited by shares and of partnerships limited by shares must be met with share and participation capital, those of limited liability companies must be met with nominal capital, and those of cooperatives must be met with cooperative capital. 2The minimum capital requirements of partnerships and sole proprietorships must be met with: - a.
- the capital accounts;
- b.
- the limited partnership contributions;
- c.
- the assets of partners with unlimited liability.
3The capital accounts and assets of partners with unlimited liability may only be counted towards the minimum capital requirement if a declaration is provided to the effect that: - a.
- in the event of liquidation, bankruptcy or probate proceedings, such accounts and assets shall be subordinate to the claims of all other creditors; and
- b.
- the portfolio manager or trustee undertakes:
- 1.
- neither to net such accounts and assets with its own claims nor to secure them with its own assets,
- 2.
- without the prior consent of the supervisory organisation, not to reduce any of the capital components as defined in paragraph 2 letters a and c to the extent that the minimum capital requirement is no longer met.
4The declaration in accordance with paragraph 3 is irrevocable. It must be made in writing or in another form demonstrable via text and filed with the supervisory organisation. 5FINMA may permit partnerships and sole proprietorships to provide, instead of minimum capital, collateral in the form of a bank guarantee or a cash deposit in a blocked account with a bank, said collateral being equivalent to the minimum capital in accordance with Article 22 paragraph 1 FinIA.
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Art. 28 Level of capital adequacy
(Art. 23 FinIA) 1The level of capital adequacy stipulated in Article 23 FinIA must be maintained at all times. 2The following are fixed costs in accordance with Article 23 paragraph 2 FinIA: - a.
- personnel expenses;
- b.
- operating business expenses;
- c.
- depreciation of investment assets;
- d.
- expenses for valuation adjustments, provisions and losses.
3The portion of personnel expenses which is exclusively dependent on the business result or in relation to which no legal entitlement exists is to be deducted from personnel expenses. 4Where there are legitimate grounds for so doing, FINMA may ease requirements.
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Art. 29 Qualifying capital
(Art. 23 FinIA) 1Legal entities may count the following as qualifying capital: - a.
- the paid-up share and participation capital in the case of a company limited by shares and a partnership limited by shares, the nominal capital in the case of a limited liability company and the cooperative capital in the case of a cooperative;
- b.
- the general statutory and other reserves;
- c.
- retained earnings;
- d.
- the net profit for the current financial year after deduction of the estimated share in the profit distribution, provided an audit review or an audit pursuant to the CO16 of the interim or annual accounts confirms the assurances stipulated;
- e.
- hidden reserves, provided they are assigned to a separate account and designated as capital and their qualifiability as such is confirmed on the basis of the audit in accordance with Article 62 FinIA.
2Partnerships and sole proprietorships may count the following as qualifying capital: - a.
- the capital accounts and assets of partners with unlimited liability if the conditions under Article 27 paragraph 3 are satisfied;
- b.
- the limited partnership contribution.
3Portfolio managers and trustees may also count as qualifying capital any loans granted to them, including bonds with a maturity of at least five years, if a declaration is provided to the effect that: - a.
- in the event of liquidation, bankruptcy or probate proceedings, such loans shall be subordinate to the claims of all other creditors; and
- b.
- the portfolio manager or trustee undertakes neither to net such loans with its own claims nor to secure them with its own assets.
4The declaration in accordance with paragraph 3 is irrevocable. It must be made in writing or in another form demonstrable via text and filed with the supervisory organisation.
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Art. 30 Deductions applied when calculating the level of capital adequacy
(Art. 23 FinIA) The following shall be deducted when calculating the level of capital adequacy: - a.
- the loss carried forward and the loss for the current financial year;
- b.
- any unsecured valuation adjustments and provisions for the current financial year;
- c.
- in the case of loans in accordance with Article 29 paragraph 3: 20% of the original nominal amount per year for the last five years prior to repayment;
- d.
- intangible assets (including start-up and organisational costs as well as goodwill) with the exception of software;
- e.
- in the case of a company limited by shares and a partnership limited by shares: the shares which they hold in the company at their own risk;
- f.
- in the case of a limited liability company: the capital contribution which it holds in the company at its own risk;
- g.
- the carrying amount of participations.
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Art. 31 Collateral
(Art. 22 para. 2 and 23 FinIA) 1Collateral is deemed to be appropriate if the applicable provisions on capital are complied with. 2Insofar as it covers the risks entailed by the business model, professional indemnity insurance may be counted 50% towards qualifying capital. 3FINMA shall regulate the details of professional liability insurance, in particular with regard to term, notice period, the amount of insurance cover, the professional liability risks to be covered and the reporting duties.
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Art. 32 Accounting
(Art. 9, 22 and 23 FinIA) 1Portfolio managers and trustees are subject to the accounting regulations of the CO17. Article 957 paragraphs 2 and 3 CO are not applicable. 2Where portfolio managers and trustees are subject to specific, more stringent accounting standards, such standards take precedence.
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Art. 33 Internal documentation
(Art. 9 FinIA) Internal documentation of the portfolio managers and trustees must allow the audit firm, the supervisory organisation and FINMA to form a reliable picture of the business activities.
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