Ordinance
on Financial Institutions
(Financial Institutions Ordinance, FinIO)

(Art. 1 and 72 Fin­IA)

This Or­din­ance gov­erns:

a.

the au­thor­isa­tion con­di­tions for fin­an­cial in­sti­tu­tions;

b.

the du­ties of the fin­an­cial in­sti­tu­tions;

c.

the su­per­vi­sion of the fin­an­cial in­sti­tu­tions.

(Art. 2 Fin­IA)

This Or­din­ance ap­plies to fin­an­cial in­sti­tu­tions op­er­at­ing in or from Switzer­land.

(Art. 2 para. 2 let. a Fin­IA)

Com­pan­ies or units of a group are deemed to have busi­ness ties in­so­far as they provide fin­an­cial ser­vices or ser­vices in the ca­pa­city of trust­ee for oth­er com­pan­ies or units of the same group.

(Art. 2 para. 2 let. a Fin­IA)

¹ The fol­low­ing per­sons are deemed to have fam­ily ties with one an­oth­er:

a.

re­l­at­ives by blood or by mar­riage in the dir­ect line;

b.

re­l­at­ives by blood or by mar­riage up to the fourth de­gree in the col­lat­er­al line;

c.

spouses and re­gistered part­ners;

d.

co­heirs and leg­atees from suc­ces­sion un­til com­ple­tion of the di­vi­sion of es­tate or al­loc­a­tion of the leg­acy;

e.

re­main­der­men and re­mainder­wo­men and re­sid­uary leg­atees in ac­cord­ance with Art­icle 488 of the Swiss Civil Code² (CC);

f.

per­sons liv­ing in a per­man­ent life part­ner­ship with a port­fo­lio man­ager or trust­ee.

²Fam­ily ties are deemed to ex­ist in­so­far as port­fo­lio man­agers man­age as­sets or trust­ees man­age in-house funds in fa­vour of per­sons who have fam­ily ties with one an­oth­er, if the port­fo­lio man­agers or trust­ees are dir­ectly or in­dir­ectly con­trolled by:

a.

third parties who have fam­ily ties with these per­sons;

b.

a trust, a found­a­tion or a sim­il­ar leg­al con­struct set up by a per­son with fam­ily ties.

³Para­graph 2 also ap­plies in­so­far as, in ad­di­tion to the per­sons with fam­ily ties, in­sti­tu­tions with a pub­lic or not-for-profit pur­pose are also be­ne­fi­ciar­ies.

(Art. 2 para. 2 let. b Fin­IA)

Em­ploy­ee par­ti­cip­a­tion schemes are deemed to be plans which:

a.

rep­res­ent a dir­ect or in­dir­ect in­vest­ment in the com­pany of the em­ploy­er or in an­oth­er com­pany which by vir­tue of a ma­jor­ity of votes or by some oth­er means is un­der uni­form man­age­ment with the com­pany of the em­ploy­er (group); and

b.

are dir­ec­ted at em­ploy­ees who at the time of the of­fer are not un­der no­tice.

(Art. 2 para. 2 let. d Fin­IA)

Leg­ally reg­u­lated man­dates are in par­tic­u­lar:

a.

an ad­vance care dir­ect­ive in ac­cord­ance with Art­icles 360–369 CC³;

b.

a rep­res­ent­at­ive deputy­ship to man­age as­sets in ac­cord­ance with Art­icle 395 CC;

c.

a gen­er­al deputy­ship in ac­cord­ance with Art­icle 398 CC;

d.

an ex­ecut­or­ship in ac­cord­ance with Art­icles 517 and 518 CC;

e.

an es­tate ad­min­is­tra­tion in ac­cord­ance with Art­icles 554 and 555 CC;

f.

an of­fi­cial li­quid­a­tion in ac­cord­ance with Art­icles 593–596 CC;

g.

a rep­res­ent­a­tion of heirs in ac­cord­ance with Art­icle 602 para­graph 3 CC;

h.

a bank­ruptcy ad­min­is­tra­tion in ac­cord­ance with Art­icles 237 para­graph 2 and Art­icle 240 of the Fed­er­al Act of 11April 1889⁴ on Debt En­force­ment and Bank­ruptcy (DEBA);

i.

an ad­min­is­trat­ive re­ceiv­er­ship in ac­cord­ance with Art­icle 295 DEBA;

j.

en­force­ment tasks un­der an or­din­ary com­pos­i­tion agree­ment in ac­cord­ance with Art­icle 314 para­graph 2 DEBA;

k.

an ap­point­ment as li­quid­at­or un­der a com­pos­i­tion agree­ment with as­sign­ment of as­sets in ac­cord­ance with Art­icle 317 DEBA;

l.

an ap­point­ment as in­vest­ig­at­ing agent in ac­cord­ance with Art­icle 36 of the Fin­an­cial Mar­ket Su­per­vi­sion Act of 22 June 2007⁵ (FIN­MASA);

m.

a re­struc­tur­ing man­date in ac­cord­ance with Art­icle 28 para­graph 3 of the Bank­ing Act of 8Novem­ber 1934⁶ (BankA), Art­icle 67 para­graph 1 Fin­IA and Art­icle 88 para­graph 1 of the Fin­an­cial Mar­ket In­fra­struc­ture Act of 19 June 2015⁷ (Fin­MIA);

n.

a bank­ruptcy li­quid­a­tion in ac­cord­ance with Art­icle 33 para­graph 2 BankA, Art­icle 67 para­graph 1 Fin­IA, Art­icle 137 para­graph 3 of the Col­lect­ive In­vest­ment Schemes Act of 23June 2006⁸ (CISA), Art­icle 88 para­graph 1 Fin­MIA and Art­icle 53 para­graph 3 of the In­sur­ance Su­per­vi­sion Act of 17Decem­ber 2004⁹ (ISA);

o.

a li­quid­a­tion in ac­cord­ance with Art­icle 23^quin­quies para­graph 1 BankA, Art­icle 66 para­graph 2 Fin­IA, Art­icle 134 CISA, Art­icle 87 para­graph 2 Fin­MIA and Art­icle 52 ISA.

(Art. 2 Fin­IA)

Where there are le­git­im­ate grounds for so do­ing, the Swiss Fin­an­cial Mar­ket Su­per­vis­ory Au­thor­ity (FINMA) may fully or par­tially ex­empt man­agers of col­lect­ive as­sets from the pro­vi­sions of the Fin­IA and the present Or­din­ance if:

a.

the pro­tect­ive pur­pose of the Fin­IA is not im­paired; and

b.

the man­age­ment of col­lect­ive as­sets has been del­eg­ated to them solely by the fol­low­ing per­sons:

1.

au­thor­ised parties in ac­cord­ance with Art­icle 2 para­graph 1 let­ters c and d as well as para­graph 2 let­ters f–i Fin­IA,

2.

au­thor­ised parties in ac­cord­ance with Art­icle 13 para­graph 2 let­ters b–d CISA¹⁰, or

3.

for­eign com­pan­ies which with re­gard to or­gan­isa­tion and in­vestor rights are sub­ject to rules that are equi­val­ent to the pro­vi­sions of the Fin­IA and the CISA.

(Art. 4 para. 2 Fin­IA)

The func­tions of a group com­pany are sig­ni­fic­ant with re­spect to the activ­it­ies which re­quire au­thor­isa­tion if they are ne­ces­sary for the con­tinu­ation of im­port­ant busi­ness pro­cesses, in par­tic­u­lar in the areas:

a.

li­quid­ity man­age­ment;

b.

treas­ury;

c.

risk man­age­ment;

d.

mas­ter data ad­min­is­tra­tion and ac­count­ing;

e.

per­son­nel;

f.

in­form­a­tion tech­no­logy;

g.

trad­ing and set­tle­ment;

h.

leg­al and com­pli­ance.

(Art. 5 and 7 Fin­IA)

¹The fin­an­cial in­sti­tu­tion shall sub­mit an au­thor­isa­tion ap­plic­a­tion to FINMA. The ap­plic­a­tion shall con­tain all in­form­a­tion and doc­u­ments re­quired to as­sess it, spe­cific­ally in­form­a­tion and doc­u­ments on:

a.

the or­gan­isa­tion, in par­tic­u­lar on cor­por­ate gov­ernance and con­trol as well as on risk man­age­ment (Art­icles 9, 20, 21 and 33 Fin­IA);

b.

the place of man­age­ment (Art­icle 10 Fin­IA);

c.

the guar­an­tee (Art­icle 11 Fin­IA);

d.

tasks and the del­eg­a­tion of such tasks (Art­icles 14, 19, 26, 27, 34, 35 and 44 Fin­IA);

e.

min­im­um cap­it­al and col­lat­er­al (Art­icles 22, 28, 36 and 45 Fin­IA);

f.

cap­it­al (Art­icles 23, 29, 37 and 46 Fin­IA);

g.

the om­buds­man's of­fice (Art­icle 16 Fin­IA);

h.

the su­per­vis­ory or­gan­isa­tion and the audit firm (Art­icles 61–63 Fin­IA).

²In­sur­ance com­pan­ies as defined in the ISA¹¹ are ex­empt from the duty to ob­tain au­thor­isa­tion as a man­ager of col­lect­ive as­sets.

³Ex­emp­tion from the duty to ob­tain au­thor­isa­tion as a trust­ee from FINMA can be gran­ted to trust­ees which act ex­clus­ively as trust­ees for trusts which were es­tab­lished by the same per­son or in fa­vour of the same fam­ily and which are held and mon­itored by a fin­an­cial in­sti­tu­tion which pos­sesses au­thor­isa­tion in ac­cord­ance with Art­icle 5 para­graph 1 or Art­icle 52 para­graph 1 Fin­IA.

(Art. 8 para. 2 Fin­IA)

Changes of ma­ter­i­al sig­ni­fic­ance for fin­an­cial in­sti­tu­tions in ac­cord­ance with Art­icle 8 para­graph 2 Fin­IA are in par­tic­u­lar:

a.

changes in or­gan­isa­tion­al and part­ner­ship doc­u­ments;

b.

changes in the per­sons re­spons­ible for ad­min­is­tra­tion and man­age­ment;

c.

changes in min­im­um cap­it­al and cap­it­al ad­equacy, in par­tic­u­lar fall­ing short of min­im­um re­quire­ments;

d.

facts which are likely to call in­to ques­tion the good repu­ta­tion or the guar­an­tee of ir­re­proach­able busi­ness con­duct on the part of the fin­an­cial in­sti­tu­tion or of the per­sons en­trus­ted with man­age­ment tasks as well as of own­ers of a qual­i­fied par­ti­cip­a­tion, spe­cific­ally the ini­ti­ation of crim­in­al pro­ceed­ings;

e.

facts which call in­to ques­tion prudent and sound busi­ness activ­ity on the part of the fin­an­cial in­sti­tu­tion ow­ing to the in­flu­ence of own­ers of a qual­i­fied par­ti­cip­a­tion.

(Art. 5, 7 and 8 Fin­IA)

¹FINMA may de­term­ine the form for sub­mis­sion, spe­cific­ally for the fol­low­ing doc­u­ments:

a.

ap­plic­a­tions for au­thor­isa­tion from fin­an­cial in­sti­tu­tions and ne­ces­sary doc­u­ments;

b.

re­ports of changes in ac­cord­ance with Art­icle 8 Fin­IA and ne­ces­sary doc­u­ments.

²It may des­ig­nate a third party as re­cip­i­ent of sub­mit­ted doc­u­ments.

(Art. 9 Fin­IA)

¹Fin­an­cial in­sti­tu­tions must define their or­gan­isa­tion in their or­gan­isa­tion­al prin­ciples.

²They must de­scribe their area of busi­ness in fac­tu­ally and geo­graph­ic­ally pre­cise terms in the prin­cip­al doc­u­ments. The busi­ness area and its geo­graph­ic­al ex­tent must be com­men­sur­ate with the fin­an­cial pos­sib­il­it­ies as well as with the op­er­a­tion­al or­gan­isa­tion.

³Fin­an­cial in­sti­tu­tions must have per­son­nel in place who are ap­pro­pri­ately and suit­ably qual­i­fied to per­form their busi­ness activ­it­ies.

⁴Risk man­age­ment must en­com­pass all busi­ness activ­it­ies and be or­gan­ised in such a way that all the main risks can be iden­ti­fied, as­sessed, con­trolled and mon­itored.

(Art. 11 Fin­IA)

¹The ap­plic­a­tion for au­thor­isa­tion for a new fin­an­cial in­sti­tu­tion must con­tain in par­tic­u­lar the fol­low­ing in­form­a­tion and doc­u­ment­a­tion on the per­sons re­spons­ible for ad­min­is­tra­tion and man­age­ment in ac­cord­ance with Art­icle 11 para­graphs 1 and 2 Fin­IA as well as on the own­ers of a qual­i­fied par­ti­cip­a­tion in ac­cord­ance with Art­icle 11 para­graph 3 Fin­IA:

a.

nat­ur­al per­sons:

1.

de­tails of na­tion­al­ity, place of res­id­ence, qual­i­fied par­ti­cip­a­tions in the fin­an­cial in­sti­tu­tion or in oth­er com­pan­ies and pending court and ad­min­is­trat­ive pro­ceed­ings,

2.

a cur­riculum vitae signed by the rel­ev­ant per­son,

3.

ref­er­ences,

4.¹²

a stand­ard private ex­tract from the VOSTRA in­form­a­tion sys­tem of the Re­gister of Crim­in­al Re­cords and an ex­tract from the debt en­force­ment re­gister or cor­res­pond­ing con­firm­a­tion if the per­son is res­id­ent abroad;

b.

com­pan­ies:

1.

the art­icles of as­so­ci­ation,

2.

an ex­tract from the com­mer­cial re­gister or a cor­res­pond­ing at­test­a­tion,

3.

a de­scrip­tion of busi­ness activ­it­ies, the fin­an­cial situ­ation and, if ap­plic­able, the group struc­ture,

4.

de­tails of com­pleted and pending court or ad­min­is­trat­ive pro­ceed­ings.

²The en­vis­aged activ­ity at the fin­an­cial in­sti­tu­tion as well as the nature of the in­ten­ded in­vest­ments must also be taken in­to ac­count when as­sess­ing the good repu­ta­tion, the guar­an­tee of ir­re­proach­able busi­ness con­duct and the re­quired spe­cial­ist qual­i­fic­a­tions of the per­sons re­spons­ible for ad­min­is­tra­tion and man­age­ment.

³Own­ers of a qual­i­fied par­ti­cip­a­tion must make a de­clar­a­tion to FINMA stat­ing wheth­er they hold the par­ti­cip­a­tion in ques­tion for their own ac­count or on a fi­du­ciary basis for third parties, and wheth­er they have gran­ted op­tions or sim­il­ar rights with re­spect to this par­ti­cip­a­tion.

⁴Se­cur­it­ies firms must sub­mit to FINMA with­in 60 days of the end of the fin­an­cial year a list of all per­sons who hold a qual­i­fied par­ti­cip­a­tion in them. This list shall con­tain de­tails on the iden­tity and per­cent­age hold­ing of all qual­i­fied par­ti­cipants as at the rel­ev­ant clos­ing date, as well as any changes re­l­at­ive to the pri­or-year clos­ing date. In ad­di­tion, the in­form­a­tion and doc­u­ment­a­tion set out in para­graph 1 is to be sub­mit­ted for any qual­i­fied par­ti­cipants be­ing re­por­ted for the first time.

⁵Per­sons con­nec­ted through busi­ness ties or in any oth­er man­ner who jointly hold at least 10% of the share cap­it­al or votes of the fin­an­cial in­sti­tu­tion or per­sons jointly sig­ni­fic­antly in­flu­en­cing the busi­ness activ­it­ies of the fin­an­cial in­sti­tu­tion in an­oth­er man­ner are deemed to be a qual­i­fied par­ti­cipant in ac­cord­ance with Art­icle 11 para­graph 4 Fin­IA.

(Art. 12 Fin­IA)

¹The ques­tion of what con­sti­tutes a pub­lic of­fer is de­term­ined on the basis of Art­icle 3 let­ters g and h of the Fin­an­cial Ser­vices Act of 15 June 2018¹³ (FinSA).

²Of­fers to schemes and per­sons in ac­cord­ance with Art­icle 65 para­graphs 2 and 3 are not deemed pub­lic.

(Art. 14 para. 1 Fin­IA)

¹Tasks in ac­cord­ance with Art­icle 14 para­graph 1 Fin­IA are deemed del­eg­ated if fin­an­cial in­sti­tu­tions ap­point a ser­vice pro­vider to in­de­pend­ently and per­man­ently per­form in full or in part a ma­ter­i­al task, thereby chan­ging the cir­cum­stances un­der­ly­ing the au­thor­isa­tion.

²Ma­ter­i­al tasks are deemed to be:

a.

for port­fo­lio man­agers and trust­ees: tasks in ac­cord­ance with Art­icle 19 Fin­IA;

b.

for man­agers of col­lect­ive as­sets: tasks in ac­cord­ance with Art­icle 26 Fin­IA;

c.

for fund man­age­ment com­pan­ies: tasks in ac­cord­ance with Art­icle 32, Art­icle 33 para­graph 4 and Art­icle34 Fin­IA;

d.

for se­cur­it­ies firms: tasks in ac­cord­ance with Art­icles 41 and 44 Fin­IA.

(Art. 14 para. 1 Fin­IA)

¹Fin­an­cial in­sti­tu­tions may del­eg­ate to third parties only tasks in ac­cord­ance with Art­icle 14 para­graph 1 Fin­IA which do not need to be with­in the de­cision-mak­ing re­mit of the body re­spons­ible for man­age­ment or for gov­ernance, su­per­vi­sion and con­trol.

²Del­eg­a­tion must not im­pair the ap­pro­pri­ate­ness of the op­er­a­tion­al or­gan­isa­tion.

³The op­er­a­tion­al or­gan­isa­tion is no longer deemed to be ap­pro­pri­ate if a fin­an­cial in­sti­tu­tion:

a.

does not have the ne­ces­sary per­son­nel re­sources and spe­cial­ist know­ledge to se­lect, in­struct and mon­it­or the third party and man­age the as­so­ci­ated risks, or

b.

does not have the ne­ces­sary rights to is­sue in­struc­tions to or con­trol the third party.

(Art. 14 para. 1 Fin­IA)

¹The fin­an­cial in­sti­tu­tions re­main re­spons­ible for the ful­fil­ment of su­per­vis­ory du­ties and when del­eg­at­ing tasks shall safe­guard cli­ents' in­terests.

²They shall agree with the third party in writ­ing or in an­oth­er form demon­strable via text which tasks are to be del­eg­ated. The fol­low­ing in par­tic­u­lar are to be laid down in the agree­ment:

a.

the au­thor­it­ies and re­spons­ib­il­it­ies;

b.

any powers of sub-del­eg­a­tion;

c.

the third party's duty to render ac­count;

d.

the fin­an­cial in­sti­tu­tions' rights of con­trol.

³Fin­an­cial in­sti­tu­tions shall lay down in their or­gan­isa­tion­al prin­ciples the tasks del­eg­ated as well as de­tails of the pos­sib­il­ity of sub-del­eg­a­tion.

⁴Del­eg­a­tion is to be defined such that the fin­an­cial in­sti­tu­tion, its in­tern­al aud­it­ors, the audit firm, the su­per­vis­ory or­gan­isa­tion and FINMA can in­spect and re­view the del­eg­ated task.

(Art. 15 Fin­IA)

¹The no­ti­fic­a­tion which a fin­an­cial in­sti­tu­tion is re­quired to sub­mit to FINMA be­fore en­ga­ging in activ­it­ies abroad must con­tain all the in­form­a­tion and doc­u­ments needed to as­sess such activ­it­ies, spe­cific­ally:

a.

a busi­ness plan de­scrib­ing in par­tic­u­lar the nature of the planned trans­ac­tions and the or­gan­isa­tion­al struc­ture;

b.

the name and ad­dress of the of­fice abroad;

c.

the names of the per­sons re­spons­ible for ad­min­is­tra­tion and man­age­ment;

d.

the audit­ing firm;

e.

the name and ad­dress of the su­per­vis­ory au­thor­ity in the for­eign state in which the re­gistered of­fice or dom­i­cile is loc­ated.

²Fur­ther­more, the fin­an­cial in­sti­tu­tion shall no­ti­fy FINMA of:

a.

the dis­con­tinu­ation of busi­ness activ­it­ies abroad;

b.

any ma­ter­i­al change in busi­ness activ­it­ies abroad;

c.

a change in audit firm;

d.

a change in the su­per­vis­ory au­thor­ity in the for­eign state in which the re­gistered of­fice or dom­i­cile is loc­ated.

(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.

(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.

(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.

(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.

(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.

(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 BankA¹⁴, a se­cur­it­ies firm pur­su­ant to the Fin­IA, a trad­ing fa­cil­ity for dis­trib­uted ledger tech­no­logy se­cur­it­ies (DLT trad­ing fa­cil­ity) in ac­cord­ance with the Fin­MIA¹⁵ or oth­er in­sti­tu­tion that is sub­ject to su­per­vi­sion equi­val­ent to that in Switzer­land.¹⁶

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).

(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.

(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.

(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.

(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.

(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 CO¹⁷ 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.

(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.

(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.

(Art. 9, 22 and 23 Fin­IA)

¹Port­fo­lio man­agers and trust­ees are sub­ject to the ac­count­ing reg­u­la­tions of the CO¹⁸. 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.

(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.

(Art. 24 para. 1 and 2 Fin­IA)

¹The fol­low­ing ap­ply to cal­cu­la­tion of the thresholds for col­lect­ive in­vest­ment schemes man­aged by the man­ager of col­lect­ive as­sets in ac­cord­ance with Art­icle 24 para­graph 2 let­ter a Fin­IA:

a.

As­sets man­aged in­clude all Swiss and for­eign col­lect­ive in­vest­ment schemes man­aged by the same man­ager ir­re­spect­ive of wheth­er it man­ages them dir­ectly or via del­eg­a­tion or via a com­pany with which it is con­nec­ted through:

1.

a single man­age­ment;

2.

a re­la­tion­ship of com­mon con­trol; or

3.

a sig­ni­fic­ant dir­ect or in­dir­ect par­ti­cip­a­tion.

b.

The value of the as­sets is cal­cu­lated on at least a quarterly basis, un­der due con­sid­er­a­tion of any lever­age ef­fect.

c.

For col­lect­ive in­vest­ment schemes that were es­tab­lished more than 12 months pre­vi­ously, the threshold may be cal­cu­lated on the basis of the av­er­age value of the as­sets over the last four quar­ters.

d.

The value of the col­lect­ive in­vest­ment schemes pur­su­ant to Art­icle 24 para­graph 2 let­ter a item 2 Fin­IA is cal­cu­lated on the basis of the cap­it­al com­mit­ments or the nom­in­al value of the col­lect­ive in­vest­ment schemes con­cerned, provided the price of the in­vest­ments un­der­ly­ing such schemes is not ob­tained through trad­ing on a reg­u­lated mar­ket.

²The fol­low­ing ap­ply to cal­cu­la­tion of the thresholds for the as­sets of oc­cu­pa­tion­al pen­sion schemes man­aged by the man­ager of col­lect­ive as­sets with­in the mean­ing of Art­icle 24 para­graph 2 let­ter b Fin­IA:

a.

As­sets of the fol­low­ing oc­cu­pa­tion­al pen­sion schemes shall be in­cluded:

1.

re­gistered and non-re­gistered oc­cu­pa­tion­al pen­sion schemes;

2.

em­ploy­er-sponsored wel­fare funds;

3.

in­vest­ment found­a­tions;

4.

pil­lar 3a found­a­tions;

5.

ves­ted be­ne­fits found­a­tions.

b.

The man­ager shall cal­cu­late on a quarterly basis wheth­er the threshold of CHF 100 mil­lion has been reached.

c.

The oc­cu­pa­tion­al pen­sion scheme shall cal­cu­late an­nu­ally wheth­er the threshold of 20% has been reached in the man­dat­ory seg­ment. It shall in­form the man­ager of the value cal­cu­lated.

³Threshold val­ues in ac­cord­ance with Art­icle 24 para­graph 2 let­ters a and b Fin­IA shall not be ad­ded to­geth­er.

⁴FINMA reg­u­lates the de­tails for cal­cu­lat­ing the thresholds and the lever­age ef­fect in ac­cord­ance with para­graphs 1 and 2.

(Art. 24 para. 1 and 2 Fin­IA)

¹If a man­ager ex­ceeds a threshold in ac­cord­ance with Art­icle 24 para­graph 2 Fin­IA, it shall no­ti­fy FINMA to that ef­fect with­in 10 days.

²The man­ager must sub­mit to the lat­ter an ap­plic­a­tion for au­thor­isa­tion pur­su­ant to Art­icle 24 para­graph 1 Fin­IA with­in 90 days if, dur­ing this peri­od, they have not made changes to their busi­ness mod­el which make a re­newed ex­ceed­ing of the thresholds ap­pear un­likely.

³If changes are made to the busi­ness mod­el with­in the mean­ing of para­graph 2 dur­ing an on­go­ing au­thor­isa­tion pro­ced­ure, the au­thor­isa­tion pro­ced­ure will be rendered un­ne­ces­sary.

(Art. 24 para. 3 Fin­IA)

FINMA shall grant a port­fo­lio man­ager in ac­cord­ance with Art­icle 24 para­graph 2 Fin­IA au­thor­isa­tion in ac­cord­ance with Art­icle 24 para­graph 3 Fin­IA if:

a.

it has its re­gistered of­fice in Switzer­land;

b.

the con­di­tions of au­thor­isa­tion in ac­cord­ance with Art­icle 24 para­graph 1 Fin­IA are sat­is­fied; and

c.

Swiss or ap­plic­able for­eign law provides that the man­age­ment of col­lect­ive as­sets may only be del­eg­ated to a su­per­vised man­ager of col­lect­ive as­sets.

(Art. 6 Fin­IA)

Man­agers of col­lect­ive as­sets also wish­ing to act as trust­ees re­quire ad­di­tion­al au­thor­isa­tion for this.

(Art. 9 Fin­IA)

¹Two au­thor­ised sig­nat­or­ies must sign jointly.

²Man­agers of col­lect­ive as­sets 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.

³The body re­spons­ible for man­age­ment must com­prise at least two per­sons.

⁴Man­agers of col­lect­ive as­sets must ap­point a spe­cial body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

⁵Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low de­par­tures from these re­quire­ments; it may grant ex­emp­tions in par­tic­u­lar from the duty in ac­cord­ance with para­graph 4 where the nature and scope of activ­ity so dic­tate, in par­tic­u­lar if the com­pany has ten or few­er full-time po­s­i­tions or an­nu­al gross earn­ings of less than CHF 5 mil­lion.

(Art. 9 Fin­IA)

¹The ma­jor­ity of the mem­bers of the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol may not be mem­bers of the body re­spons­ible for man­age­ment.

²The chair may not at the same time hold the of­fice of chair of the body re­spons­ible for man­age­ment.

³At least one third of mem­bers must be in­de­pend­ent of the per­sons who hold a qual­i­fied par­ti­cip­a­tion in the man­ager of col­lect­ive as­sets and in com­pan­ies of the same con­glom­er­ate or group. Man­agers of col­lect­ive as­sets which are part of a fin­an­cial group sub­ject to con­sol­id­ated su­per­vi­sion by FINMA are ex­emp­ted.

⁴Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low de­par­tures from these re­quire­ments.

(Art. 26 Fin­IA)

¹The re­ceipt and trans­mis­sion of or­ders in the name of and on be­half of cli­ents in re­la­tion to fin­an­cial in­stru­ments is deemed to be an ad­min­is­trat­ive activ­ity in ac­cord­ance with Art­icle 26 para­graph 3 Fin­IA which a man­ager of col­lect­ive as­sets can per­form with­in the scope of its tasks in ac­cord­ance with Art­icle 26 Fin­IA. Art­icle 35 Fin­IA re­mains re­served.

²A man­ager of col­lect­ive as­sets which also of­fers per­son­al­ised as­set man­age­ment in ac­cord­ance with Art­icle 6 para­graph 4 in con­junc­tion with Art­icle 17 para­graph 1 Fin­IA may not in­vest the in­vestor's as­sets, wheth­er in full or in part, in units of col­lect­ive in­vest­ment schemes that it man­ages, un­less the cli­ent has giv­en their gen­er­al con­sent be­fore­hand.

³If the ren­der­ing of ad­di­tion­al ser­vices in­creases the risks to which man­agers of col­lect­ive as­sets are ex­posed, this must be taken in­to ac­count with­in the scope of su­per­vi­sion (Art­icles 61 and 63 Fin­IA).

(Art. 14 and 27 Fin­IA)

¹Wheth­er a del­eg­a­tion of in­vest­ment de­cisions is deemed to have the ne­ces­sary au­thor­isa­tion in ac­cord­ance with Art­icle 14 para­graph 1 Fin­IA is de­term­ined in ac­cord­ance with Art­icle 24 Fin­IA. For­eign man­agers of col­lect­ive as­sets must be sub­ject to au­thor­isa­tion and su­per­vi­sion which is at least equi­val­ent.

²Where for­eign law re­quires an agree­ment on co­oper­a­tion and the ex­change of in­form­a­tion with the for­eign su­per­vis­ory au­thor­it­ies, in­vest­ment de­cisions may only be del­eg­ated to man­agers of col­lect­ive as­sets abroad if such an agree­ment is in place between FINMA and the for­eign su­per­vis­ory au­thor­it­ies rel­ev­ant for the re­spect­ive in­vest­ment de­cisions.

(Art. 9 Fin­IA)

¹Man­agers of col­lect­ive as­sets must have an ap­pro­pri­ately defined risk man­age­ment sys­tem in place as well as an ef­fect­ive in­tern­al con­trol struc­ture to en­sure in par­tic­u­lar com­pli­ance with leg­al and in­tern­al pro­vi­sions.

²They shall set out guidelines for the ba­sic prin­ciples of risk man­age­ment and define their risk tol­er­ance.

³They will keep the func­tions of risk man­age­ment and com­pli­ance func­tion­ally and hier­arch­ic­ally sep­ar­ate from the op­er­a­tion­al busi­ness units, in par­tic­u­lar from the func­tion of in­vest­ment de­cisions (port­fo­lio man­age­ment).

⁴The body re­spons­ible for the gov­ernance, su­per­vi­sion and con­trol of the man­ager of col­lect­ive as­sets is charged with es­tab­lish­ing, se­cur­ing and mon­it­or­ing the in­tern­al con­trol sys­tem (ICS). This body also defines risk tol­er­ance.

⁵The body re­spons­ible for man­age­ment im­ple­ments the cor­res­pond­ing re­quire­ments stip­u­lated by the body for gov­ernance, su­per­vi­sion and con­trol, it de­vel­ops suit­able guidelines, pro­ced­ures and pro­cesses, and re­ports peri­od­ic­ally to the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

⁶Para­graphs 4 and 5 do not ap­ply to man­agers of col­lect­ive as­sets which are gran­ted an ex­emp­tion in ac­cord­ance with Art­icle 37 para­graph 5.

⁷If a body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol has been ap­poin­ted in ac­cord­ance with Art­icle 37 para­graph 4, FINMA may also re­quire that in­tern­al aud­it­ors who are in­de­pend­ent of man­age­ment be ap­poin­ted where the nature and scope of activ­ity so dic­tate.

⁸Where there are le­git­im­ate grounds for so do­ing, FINMA may de­part from these re­quire­ments.

⁹FINMA shall reg­u­late the de­tails.

(Art. 28 para. 1 and 3 Fin­IA)

¹The min­im­um cap­it­al of man­agers of col­lect­ive as­sets must amount to at least CHF 200,000 and be paid up in full. This amount must be main­tained at all times.

²The 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.

³The min­im­um cap­it­al re­quire­ments of part­ner­ships must be met with:

a.

the cap­it­al ac­counts;

b.

the lim­ited part­ner­ship con­tri­bu­tions;

c.

the as­sets of part­ners with un­lim­ited li­ab­il­ity.

⁴The 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 man­ager of col­lect­ive as­sets 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 audit firm, not to re­duce any of the cap­it­al com­pon­ents as defined in para­graph 3 let­ters a and c to the ex­tent that the min­im­um cap­it­al re­quire­ment is no longer met.

⁵The de­clar­a­tion in ac­cord­ance with para­graph 4 is ir­re­voc­able. It must be made in writ­ing or in an­oth­er form demon­strable via text and filed with the audit firm.

⁶If a man­ager of col­lect­ive as­sets for for­eign col­lect­ive in­vest­ment schemes con­ducts the fund busi­ness with­in the mean­ing of Art­icle 26 para­graph 2 Fin­IA, FINMA can stip­u­late a high­er min­im­um cap­it­al re­quire­ment.

(Art. 28 para.2 and 3 Fin­IA)

¹FINMA may per­mit part­ner­ships 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 42.

²Where there are le­git­im­ate grounds for so do­ing, FINMA may stip­u­late a dif­fer­ent min­im­um amount.

(Art. 29 Fin­IA)

¹The cap­it­al stip­u­lated in Art­icle 29 Fin­IA must be main­tained at all times and amount to at least one quarter of the fixed costs re­por­ted in the most re­cent an­nu­al ac­counts and no more than CHF 20 mil­lion, in­clud­ing cap­it­al in ac­cord­ance with para­graph 2.

²Man­agers of col­lect­ive as­sets must:

a.

hold cap­it­al amount­ing to 0.01% of the total col­lect­ive as­sets man­aged by the man­ager of col­lect­ive as­sets; or

b.

take out pro­fes­sion­al li­ab­il­ity in­sur­ance.

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.

⁴Fixed costs in ac­cord­ance with para­graph 1 are:

a.

per­son­nel ex­penses;

b.

op­er­at­ing busi­ness ex­penses;

c.

de­pre­ci­ation of in­vest­ment as­sets;

d.

ex­penses for valu­ation ad­just­ments, pro­vi­sions and losses.

⁵The 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.

⁶Where there are le­git­im­ate grounds for so do­ing, FINMA may ease re­quire­ments or im­pose stricter re­quire­ments.²⁰

(Art. 29 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, and the nom­in­al cap­it­al in the case of a lim­ited li­ab­il­ity com­pany;

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 CO²¹ of the in­ter­im or an­nu­al ac­counts con­firms the as­sur­ances stip­u­lated;

e.

hid­den re­serves, provided they are as­signed to a sep­ar­ate ac­count and des­ig­nated as own cap­it­al and their qual­i­fi­ab­il­ity as such is con­firmed on the basis of the audit in ac­cord­ance with Art­icle 63 Fin­IA.

²Part­ner­ships may count the fol­low­ing as qual­i­fy­ing cap­it­al:

a.

the cap­it­al ac­counts and as­sets of part­ners with un­lim­ited li­ab­il­ity if the con­di­tions un­der Art­icle 42 para­graph 4 are sat­is­fied;

b.

the lim­ited part­ner­ship con­tri­bu­tion.

³Man­agers of col­lect­ive as­sets 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.

they have un­der­taken neither to net such loans with their own claims nor to se­cure them with their 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 audit firm.

⁵Own cap­it­al in ac­cord­ance with para­graphs 1 and 2 must amount to at least 50% of total cap­it­al re­quired.

(Art. 29 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 45 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 of 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.

(Art. 9, 28 and 29 Fin­IA)

¹Man­agers of col­lect­ive as­sets are sub­ject to the ac­count­ing reg­u­la­tions of the CO²². Where man­agers of col­lect­ive as­sets are sub­ject to spe­cif­ic, more strin­gent ac­count­ing stand­ards, such reg­u­la­tions take pre­ced­ence.

²The man­ager of col­lect­ive as­sets shall sub­mit to FINMA the an­nu­al re­port, the sum­mary audit com­pany re­port to the gen­er­al meet­ing or mem­bers’ gen­er­al meet­ing and the full audit com­pany re­port for the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol with­in six months days of the end of the fin­an­cial year. The man­ager of col­lect­ive as­sets shall ap­pend to the an­nu­al re­port a list of the pre­scribed and avail­able cap­it­al as at the bal­ance sheet date.²³

³ The duty to pre­pare a full audit com­pany re­port does not ap­ply to man­agers of col­lect­ive as­sets that are gran­ted an ex­emp­tion in ac­cord­ance with Art­icle 37 para­graphs 4 and 5 from the duty to ap­point a spe­cial body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.²⁴

(Art. 9 Fin­IA)

In­tern­al doc­u­ment­a­tion of the man­agers of col­lect­ive as­sets must al­low the audit firm and FINMA to form a re­li­able pic­ture of the busi­ness activ­it­ies.

(Art. 32 Fin­IA)

¹The in­de­pend­ent man­age­ment of in­vest­ment funds in its own name and for the ac­count of in­vestors by the fund man­age­ment com­pany com­prises in par­tic­u­lar:

a.

de­cisions on the is­sue of units, on in­vest­ments and on their valu­ation;

b.

cal­cu­la­tion of the net as­set value;

c.

de­term­in­a­tion of the is­sue and re­demp­tion prices as well as dis­tri­bu­tions of profit;

d.

as­ser­tion of all rights per­tain­ing to the in­vest­ment fund.

²In­sti­tu­tions which en­gage solely in ad­min­is­tra­tion activ­it­ies for ex­tern­ally man­aged SICAVs pur­su­ant to CISA²⁵ man­age in­vest­ment funds in­de­pend­ently and as fund man­age­ment com­pan­ies re­quire au­thor­isa­tion in ac­cord­ance with Art­icle 5 para­graph 1 in con­junc­tion with Art­icle 32 Fin­IA.

(Art. 6 Fin­IA)

Fund man­age­ment com­pan­ies also wish­ing to act as trust­ees re­quire ad­di­tion­al au­thor­isa­tion for this.

(Art. 33 para. 1 Fin­IA)

The head of­fice of the fund man­age­ment com­pany is deemed to be in Switzer­land if the fol­low­ing con­di­tions are met:

a.

The non-trans­fer­able and in­ali­en­able du­ties of the board of dir­ect­ors in ac­cord­ance with Art­icle 716a CO²⁷ are per­formed in Switzer­land.

b.

For each of the in­vest­ment funds man­aged by the fund man­age­ment com­pany, in min­im­um the fol­low­ing tasks are per­formed in Switzer­land:

1.

de­cisions on the is­sue of units;

2.

de­cisions on in­vest­ment policy and on the valu­ation of in­vest­ments;

3.

valu­ation of in­vest­ments;

4.

de­term­in­a­tion of is­sue and re­demp­tion prices;

5.

de­term­in­a­tion of dis­tri­bu­tions of profit;

6.

de­term­in­a­tion of the con­tent of the pro­spect­us and the key in­form­a­tion doc­u­ment, of the an­nu­al or the semi-an­nu­al re­port, as well as of fur­ther pub­lic­a­tions in­ten­ded for in­vestors;

7.

keep­ing of ac­counts.

(Art. 9 and 33 Fin­IA)

¹Fund man­age­ment com­pan­ies shall as a rule have at least three full-time po­s­i­tions with au­thor­ity to sign.

²Two au­thor­ised sig­nat­or­ies must sign jointly.

³The body re­spons­ible for man­age­ment must com­prise at least two per­sons.

⁴Fund man­age­ment com­pan­ies must ap­point a spe­cial body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

⁵Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low re­lax­a­tions of these re­quire­ments or it may im­pose more strin­gent re­quire­ments.

(Art. 9 and 33 Fin­IA)

¹The body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol must com­prise at least three mem­bers.

²The ma­jor­ity of the mem­bers of this body may not also be mem­bers of the body re­spons­ible for man­age­ment.

³The chair may not at the same time hold the of­fice of chair of the body re­spons­ible for man­age­ment.

⁴At least one third of mem­bers must be in­de­pend­ent of the per­sons who hold a qual­i­fied par­ti­cip­a­tion in the fund man­age­ment com­pany and in com­pan­ies of the same group. Fund man­age­ment com­pan­ies which are part of a fin­an­cial group sub­ject to con­sol­id­ated su­per­vi­sion by FINMA are ex­emp­ted.

⁵Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low re­lax­a­tions of these re­quire­ments or it may im­pose more strin­gent re­quire­ments.

(Art. 33 para. 3 Fin­IA)

¹Sim­ul­tan­eous mem­ber­ship of the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol of the fund man­age­ment com­pany and that of the cus­todi­an bank is per­mit­ted.

²Sim­ul­tan­eous mem­ber­ship of the body re­spons­ible for man­age­ment of the fund man­age­ment com­pany and that of the cus­todi­an bank is not per­mit­ted.

³The ma­jor­ity of the mem­bers of the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol of the fund man­age­ment com­pany must be in­de­pend­ent of the per­sons at the cus­todi­an bank who are tasked with the du­ties in ac­cord­ance with Art­icle 73 CISA²⁸. Per­sons at the cus­todi­an bank at man­age­ment level tasked with du­ties in ac­cord­ance with Art­icle 73 CISA are not deemed to be in­de­pend­ent.

⁴None of the au­thor­ised sig­nat­or­ies of the fund man­age­ment com­pany may at the same time be re­spons­ible at the cus­todi­an bank for du­ties in ac­cord­ance with Art­icle 73 CISA.

(Art. 33 para. 4 Fin­IA)

¹In ad­di­tion to the tasks spe­cified in Art­icles 32 and 33 para­graph 4 Fin­IA as well as in ac­cord­ance with Art­icle 49, fund busi­ness spe­cific­ally en­tails:

a.

the rep­res­ent­a­tion of for­eign col­lect­ive in­vest­ment schemes;

b.

the ac­quis­i­tion of par­ti­cip­a­tions in com­pan­ies whose main pur­pose is the col­lect­ive in­vest­ment scheme busi­ness;

c.

the keep­ing of unit ac­counts.

²The fund man­age­ment com­pany may only per­form these activ­it­ies and any fur­ther ser­vices in ac­cord­ance with Art­icle 34 Fin­IA if its art­icles of as­so­ci­ation so provide.

³Art­icle 26 para­graph 2 Fin­IA ap­plies by ana­logy to the con­duct of fund busi­ness for for­eign col­lect­ive in­vest­ment schemes.

(Art. 34 Fin­IA)

¹Fund man­age­ment com­pan­ies shall keep their own as­sets sep­ar­ate from man­aged as­sets at all times.

²They shall en­sure that the valu­ation of in­vest­ments, port­fo­lio man­age­ment and trad­ing and set­tle­ment are kept sep­ar­ate both func­tion­ally and in terms of per­son­nel.

³A fund man­age­ment com­pany which also of­fers per­son­al­ised as­set man­age­ment in ac­cord­ance with Art­icle 6 para­graph 3 in con­junc­tion with Art­icle 17 para­graph 1 Fin­IA may not in­vest the in­vestor's as­sets, wheth­er in full or in part, in units of col­lect­ive in­vest­ment schemes that it man­ages, un­less the cli­ent has giv­en their gen­er­al con­sent be­fore­hand.

⁴Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low ex­emp­tions or it may or­der the sep­ar­a­tion of fur­ther func­tions.

(Art. 14 and 35 Fin­IA)

¹Wheth­er a del­eg­a­tion of in­vest­ment de­cisions is deemed to have the ne­ces­sary au­thor­isa­tion in ac­cord­ance with Art­icle 14 para­graph 1 Fin­IA is de­term­ined in ac­cord­ance with Art­icle 24 Fin­IA. For­eign man­agers of col­lect­ive as­sets must be sub­ject to au­thor­isa­tion and su­per­vi­sion which is at least equi­val­ent.

²Where for­eign law re­quires an agree­ment on co­oper­a­tion and the ex­change of in­form­a­tion with the for­eign su­per­vis­ory au­thor­it­ies, in­vest­ment de­cisions may only be del­eg­ated to man­agers of col­lect­ive as­sets abroad if such an agree­ment is in place between FINMA and the for­eign su­per­vis­ory au­thor­it­ies rel­ev­ant for the re­spect­ive in­vest­ment de­cisions.

(Art. 9 Fin­IA)

¹Fund man­age­ment com­pan­ies must have an ap­pro­pri­ately defined risk man­age­ment sys­tem in place as well as an ef­fect­ive in­tern­al con­trol struc­ture to en­sure in par­tic­u­lar com­pli­ance with leg­al and in­tern­al pro­vi­sions.

²They shall set out guidelines for the ba­sic prin­ciples of risk man­age­ment and define their risk tol­er­ance.

³They will keep the func­tions of risk man­age­ment and com­pli­ance func­tion­ally and hier­arch­ic­ally sep­ar­ate from the op­er­a­tion­al busi­ness units, in par­tic­u­lar from port­fo­lio man­age­ment.

⁴The body re­spons­ible for the gov­ernance, su­per­vi­sion and con­trol of the fund man­age­ment com­pany is charged with es­tab­lish­ing, se­cur­ing and mon­it­or­ing the ICS. This body also defines risk tol­er­ance.

⁵The body re­spons­ible for man­age­ment im­ple­ments the cor­res­pond­ing re­quire­ments stip­u­lated by the body for gov­ernance, su­per­vi­sion and con­trol, it de­vel­ops suit­able guidelines, pro­ced­ures and pro­cesses, and re­ports at ap­pro­pri­ate in­ter­vals to the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

⁶Where the nature and scope of activ­ity so jus­ti­fy, FINMA may re­quire the ap­point­ment of in­tern­al aud­it­ors who are in­de­pend­ent of man­age­ment.

⁷Where there are le­git­im­ate grounds for so do­ing, it may de­part from these re­quire­ments.

⁸It shall reg­u­late the de­tails.

(Art. 36 Fin­IA)

The min­im­um cap­it­al of fund man­age­ment com­pan­ies must amount to at least CHF 1 mil­lion and be paid up in full. This amount must be main­tained at all times.

(Art. 37 Fin­IA)

¹The level of cap­it­al ad­equacy stip­u­lated in Art­icle 37 Fin­IA must be main­tained at all times. They must amount to no more than CHF 20 mil­lion, in­clud­ing the cap­it­al in ac­cord­ance with para­graph 5.

²They will be cal­cu­lated as fol­lows in per­cent­ages of the total as­sets of the col­lect­ive in­vest­ment schemes man­aged by the fund man­age­ment com­pany:

a.

1% for that por­tion of the total as­sets not ex­ceed­ing CHF 50 mil­lion;

b.

¾% for that por­tion of the total as­sets ex­ceed­ing CHF 50 mil­lion, but not ex­ceed­ing CHF 100 mil­lion;

c.

½% for that por­tion of the total as­sets ex­ceed­ing CHF 100 mil­lion, but not ex­ceed­ing CHF 150 mil­lion;

d.

¼% for that por­tion of the total as­sets ex­ceed­ing CHF 150 mil­lion, but not ex­ceed­ing CHF 250 mil­lion;

e.

⅛% for that por­tion of the total as­sets ex­ceed­ing CHF 250 mil­lion.

³Where the fund man­age­ment com­pany renders fur­ther ser­vices in ac­cord­ance with Art­icle 34 Fin­IA, the op­er­a­tion­al risks arising from such trans­ac­tions are cal­cu­lated us­ing the ba­sic in­dic­at­or ap­proach as defined in Art­icle 92 of the Cap­it­al Ad­equacy Or­din­ance of 1 June 2012²⁹ (CAO).

⁴If the fund man­age­ment com­pany is en­trus­ted with the ad­min­is­tra­tion and port­fo­lio man­age­ment of the as­sets of a SICAV, its total as­sets must be in­cluded in the cal­cu­la­tion of cap­it­al in ac­cord­ance with para­graph 2.

⁵If the fund man­age­ment com­pany is solely en­trus­ted with the ad­min­is­tra­tion of a SICAV, it must hold ad­di­tion­al cap­it­al of 0.01% of the total as­sets of the SICAV.

(Art. 37 Fin­IA)

¹Fund man­age­ment com­pan­ies may count the fol­low­ing as qual­i­fy­ing cap­it­al:

a.

the paid-up share and par­ti­cip­a­tion cap­it­al;

b.

the gen­er­al stat­utory and oth­er re­serves;

c.

re­tained earn­ings;

d.

the net profit for the cur­rent fin­an­cial year after de­duc­tion of the es­tim­ated profit dis­tri­bu­tion, provided an audit re­view of the in­ter­im ac­counts in­clud­ing a com­plete in­come state­ment is avail­able;

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 63 Fin­IA.

²Fund man­age­ment com­pan­ies 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 fund man­age­ment com­pany un­der­takes neither to net such loans with its own claims nor to se­cure them with its own as­sets.

³The de­clar­a­tion in ac­cord­ance with para­graph 2 is ir­re­voc­able. It must be made in writ­ing or in an­oth­er form demon­strable via text and filed with the audit firm.

⁴Cap­it­al in ac­cord­ance with para­graph 1 must amount to at least 50% of total cap­it­al re­quired.

(Art. 37 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.

the un­se­cured valu­ation ad­just­ments and pro­vi­sions for the cur­rent fin­an­cial year;

c.

in the case of loans in ac­cord­ance with Art­icle 60 para­graph 2: 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.

own shares held by the fund man­age­ment com­pany at its own risk;

g.

the car­ry­ing amount of par­ti­cip­a­tions.

(Art. 9, 33, 36 and 37 Fin­IA)

¹Fund man­age­ment com­pan­ies are sub­ject to the ac­count­ing reg­u­la­tions of the CO³⁰. Where fund man­age­ment com­pan­ies are sub­ject to spe­cif­ic, more strin­gent ac­count­ing stand­ards, such reg­u­la­tions take pre­ced­ence.

²The fund man­age­ment com­pany shall sub­mit to FINMA the an­nu­al re­port, the sum­mary audit com­pany re­port to the gen­er­al meet­ing and the full audit com­pany re­port for the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol with­in six months of the end of the fin­an­cial year. The fund man­age­ment com­pany shall ap­pend to the an­nu­al re­port a list of the pre­scribed and avail­able cap­it­al as at the bal­ance sheet date.³¹

(Art. 9 and 33 Fin­IA)

In­tern­al doc­u­ment­a­tion of the fund man­age­ment com­pan­ies must al­low the audit firm and FINMA to form a re­li­able pic­ture of the busi­ness activ­it­ies.

(Art. 39 Fin­IA)

Art­icle 27 CISA³² and Art­icle 41 of the Col­lect­ive In­vest­ment Schemes Or­din­ance of 22 Novem­ber 2006³³ ap­ply by ana­logy to a change of fund man­age­ment com­pany.

(Art. 3 and 41 Fin­IA)

¹Se­cur­it­ies firms with­in the mean­ing of Art­icle 41 let­ter a Fin­IA are deemed to pur­sue their activ­it­ies on a com­mer­cial basis if they dir­ectly or in­dir­ectly man­age ac­counts or hold se­cur­it­ies in safe­keep­ing for more than 20 cli­ents.

²The fol­low­ing are not deemed to be cli­ents with­in the mean­ing of Art­icle 41 let­ter a Fin­IA:

a.

do­mest­ic and for­eign banks and se­cur­it­ies firms or oth­er com­pan­ies un­der state su­per­vi­sion;

b.

share­hold­ers or part­ners hold­ing a qual­i­fy­ing par­ti­cip­a­tion and per­sons with whom they have busi­ness or fam­ily ties;

c.

in­sti­tu­tion­al in­vestors with pro­fes­sion­al treas­ury op­er­a­tions.

³Activ­it­ies 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.

⁴The prop­er func­tion­ing of the fin­an­cial mar­ket is deemed po­ten­tially jeop­ard­ised with­in the mean­ing of Art­icle 41 let­ter b item 1 Fin­IA if the total volume of ex­ecuted trades in se­cur­it­ies ex­ceeds CHF 5 bil­lion per cal­en­dar year in Switzer­land.

⁵Any party ad­mit­ted as a dir­ect par­ti­cipant of a trad­ing ven­ue is deemed to be op­er­at­ing as a mem­ber of a trad­ing ven­ue with­in the mean­ing of Art­icle 41 let­ter b item 2 Fin­IA.

⁶A se­cur­it­ies firm shall pub­licly quote prices with­in the mean­ing of Art­icle 41 let­ter c Fin­IA if the prices ac­cord­ing to Art­icle 3 let­ters g and h FinSA³⁴ are part of an of­fer to the pub­lic. Of­fers to schemes and per­sons in ac­cord­ance with para­graphs 2 and 3 are not deemed pub­lic.

⁷Fund man­age­ment com­pan­ies are not deemed to be se­cur­it­ies firms.

(Art. 9 Fin­IA)

¹Se­cur­it­ies firms 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.

²The body re­spons­ible for man­age­ment must com­prise at least two per­sons.

³Firms trad­ing for the ac­count of cli­ents and firms act­ing as mar­ket makers with­in the mean­ing of Art­icle 41 let­ters a and c Fin­IA must ap­point a spe­cial body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol. Its mem­bers may not be mem­bers of the body re­spons­ible for man­age­ment.

⁴Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low re­lax­a­tions of these re­quire­ments or it may im­pose more strin­gent re­quire­ments.

(Art. 44 Fin­IA)

¹With­in the frame of their tasks in ac­cord­ance with Art­icle 44 Fin­IA, se­cur­it­ies firms shall en­sure an ef­fect­ive in­tern­al sep­ar­a­tion between the func­tions of trad­ing, as­set man­age­ment and set­tle­ment. Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low ex­emp­tions or it may or­der the sep­ar­a­tion of fur­ther func­tions.

²If they do not op­er­ate primar­ily in the fin­an­cial sec­tor, firms trad­ing for the ac­count of cli­ents and firms act­ing as mar­ket makers with­in the mean­ing of Art­icle 41 let­ters a and c Fin­IA must keep se­cur­it­ies trad­ing activ­it­ies leg­ally sep­ar­ate.

³In all oth­er re­spects, Art­icle 14 ap­plies.

(Art. 9 Fin­IA)

¹Se­cur­it­ies firms must have an ap­pro­pri­ately defined risk man­age­ment sys­tem in place as well as an ef­fect­ive in­tern­al con­trol struc­ture to en­sure in par­tic­u­lar com­pli­ance with leg­al and in­tern­al pro­vi­sions.

²They shall set out guidelines for the ba­sic prin­ciples of risk man­age­ment and define their risk tol­er­ance.

³They will keep the func­tions of risk man­age­ment and com­pli­ance func­tion­ally and hier­arch­ic­ally sep­ar­ate from the op­er­a­tion­al busi­ness units, in par­tic­u­lar from the func­tion of trad­ing.

⁴Firms trad­ing for the ac­count of cli­ents and firms act­ing as mar­ket makers with­in the mean­ing of Art­icle 41 let­ters a and c Fin­IA shall ap­point in­tern­al aud­it­ors who are in­de­pend­ent of man­age­ment. In­tern­al aud­it­ors must be provided with suf­fi­cient re­sources and have un­lim­ited audit rights.

⁵Where there are le­git­im­ate grounds for so do­ing, FINMA may al­low re­lax­a­tions of these re­quire­ments or it may im­pose more strin­gent re­quire­ments.

(Art. 45 Fin­IA)

¹The min­im­um cap­it­al of se­cur­it­ies firms must amount to at least CHF 1.5 mil­lion and be paid up in full. This amount must be main­tained at all times.

²In the case of com­pan­ies formed us­ing a con­tri­bu­tion in kind, the value of the as­sets con­trib­uted and the ex­tent of li­ab­il­it­ies must be veri­fied by a li­censed audit firm. This also ap­plies to the con­ver­sion of an ex­ist­ing com­pany in­to a se­cur­it­ies firm.

³In the case of se­cur­it­ies firms in the form of a part­ner­ship, cap­it­al is deemed to be:

a.

the cap­it­al ac­counts; and

b.

the as­sets of part­ners with un­lim­ited li­ab­il­ity.

⁴As­sets in ac­cord­ance with para­graph 3 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 as­sets shall be sub­or­din­ate to the claims of all oth­er cred­it­ors; and

b.

the se­cur­it­ies firm un­der­takes:

1.

neither to net such as­sets with its own claims nor to se­cure them with its own as­sets,

2.

without the pri­or con­sent of the audit firm, not to re­duce any of the cap­it­al com­pon­ents to the ex­tent that the min­im­um cap­it­al re­quire­ment is no longer met.

⁵The de­clar­a­tion in ac­cord­ance with para­graph 4 is ir­re­voc­able. It must be made in writ­ing or in an­oth­er form demon­strable via text and filed with the audit firm.

⁶FINMA may al­low se­cur­it­ies firms in the form of a part­ner­ship to provide, in­stead of min­im­um cap­it­al in ac­cord­ance with para­graphs 3 and 4, col­lat­er­al of at least CHF 1.5 mil­lion, for ex­ample in the form of a bank guar­an­tee or a cash de­pos­it in a blocked ac­count with a bank.

⁷Where there are le­git­im­ate grounds for so do­ing, FINMA can stip­u­late a high­er min­im­um cap­it­al re­quire­ment.

(Art. 46 Fin­IA)

¹Se­cur­it­ies firms which them­selves do not hold ac­counts in ac­cord­ance with Art­icle 44 para­graph 1 let­ter a Fin­IA must main­tain at all times cap­it­al amount­ing to at least one quarter of the fixed costs re­por­ted in the most re­cent an­nu­al ac­counts and no more than CHF 20 mil­lion.

²Fixed costs are deemed to be:

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.

⁴Se­cur­it­ies firms which them­selves hold ac­counts in ac­cord­ance with Art­icle 44 para­graph 1 let­ter a Fin­IA must com­ply with the pro­vi­sions of the CAO³⁵.

(Art. 46 Fin­IA)

¹ Se­cur­it­ies firms may in­clude the fol­low­ing as cap­it­al in ac­cord­ance with Art­icle 70 para­graphs 1 to 3:

a.

paid-up share cap­it­al plus, in the case of part­ner­ships, al­tern­at­ive cap­it­al in­stru­ments;

b.

dis­closed re­serves;

c.

re­tained earn­ings;

d.

the quarterly profits after de­duc­tion of the es­tim­ated profit dis­tri­bu­tion amount;

e.

sub­or­din­ated bonds that are only re­pay­able with the con­sent of FINMA.

² The cap­it­al un­der para­graph 1 let­ters a to c can be in­cluded in full.

³ 70% of the quarterly profits may be in­cluded after de­duct­ing the es­tim­ated profit dis­tri­bu­tion, sub­ject to the ex­ist­ence of a com­plete in­come state­ment in ac­cord­ance with FINMA's im­ple­ment­ing pro­vi­sions based on Art­icle 42 of the Bank­ing Or­din­ance of 30 April 2014³⁷ or of a com­plete in­come state­ment in ac­cord­ance with an in­ter­na­tion­al stand­ard re­cog­nised by FINMA, even if the in­come state­ment has not been audited. Where jus­ti­fied, FINMA can re­quire an at­test­a­tion.

⁴The fol­low­ing must be de­duc­ted in full from the eli­gible cap­it­al un­der para­graph 1 let­ters a to d:

a.

the loss car­ried for­ward and the loss for the cur­rent fin­an­cial year;

b.

the value of any par­ti­cip­a­tions in the con­text of the in­di­vidu­al en­tity cal­cu­la­tion;

c.

good­will, in­clud­ing any good­will in­cluded in the valu­ation of sig­ni­fic­ant in­terests in fin­an­cial sec­tor en­tit­ies out­side the scope of con­sol­id­a­tion, and in­tan­gible as­sets;

d.

de­ferred tax as­sets (DTAs) that de­pend on fu­ture prof­it­ab­il­ity, whereby off­set­ting against cor­res­pond­ing de­ferred tax li­ab­il­it­ies with­in the same geo­graph­ic­al and ma­ter­i­al tax jur­is­dic­tion is per­mit­ted.

⁵ If the cap­it­al un­der para­graph 1 let­ters a to d ex­ceeds CHF 1.5 mil­lion after the de­duc­tions un­der para­graph 4, 40% of the sub­or­din­ated bonds may be in­cluded for the ex­cess amount.

(Art. 46 Fin­IA)

¹Se­cur­it­ies firms which them­selves do not hold ac­counts in ac­cord­ance with Art­icle 44 para­graph 1 let­ter a Fin­IA must in­vest their re­sources such that suf­fi­cient li­quid­ity is guar­an­teed at all times.

²Se­cur­it­ies firms which them­selves hold ac­counts in ac­cord­ance with Art­icle 44 para­graph 1 let­ter a Fin­IA must com­ply with the pro­vi­sions of the Li­quid­ity Or­din­ance of 30 Novem­ber 2012³⁸.

(Art. 45–48 Fin­IA)

The pro­vi­sions on ac­count­ing con­tained in the Bank­ing Or­din­ance of 30 April 2014³⁹ ap­ply by ana­logy.

(Art. 9 Fin­IA)

In­tern­al doc­u­ment­a­tion of the se­cur­it­ies firms must al­low the audit firm and FINMA to form a re­li­able pic­ture of the busi­ness activ­it­ies.

(Art. 50 Fin­IA)

¹The se­cur­it­ies firm must keep a re­cord of all or­ders re­ceived by it and all trans­ac­tions in se­cur­it­ies ex­ecuted by it.

²The re­cord-keep­ing duty also ap­plies to or­ders and trans­ac­tions in de­riv­at­ives whose un­der­ly­ing in­stru­ments are se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity⁴⁰.

³It ap­plies not only to trans­ac­tions for own ac­count, but also to trans­ac­tions ex­ecuted on be­half of cli­ents.

⁴FINMA shall reg­u­late which in­form­a­tion is ne­ces­sary and what form it is to be re­cor­ded in.

(Art. 51 Fin­IA)

¹The se­cur­it­ies firm shall re­port all trans­ac­tions it ex­ecutes in­volving se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity. In par­tic­u­lar, the fol­low­ing must be re­por­ted:

a.

the des­ig­na­tion and num­ber of the se­cur­it­ies pur­chased or sold;

b.

the volume, date and time of the trans­ac­tion;

c.

the price;

d.

the de­tails ne­ces­sary to identi­fy the be­ne­fi­cial own­er.

²The re­port­ing duty also ap­plies to trans­ac­tions in de­riv­at­ives whose un­der­ly­ing in­stru­ments are se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity.

³It ap­plies not only to trans­ac­tions for own ac­count, but also to trans­ac­tions ex­ecuted on be­half of cli­ents.

⁴The fol­low­ing trans­ac­tions ex­ecuted abroad do not have to be re­por­ted:

a.

trans­ac­tions in se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity in Switzer­land and in de­riv­at­ives with such se­cur­it­ies as their un­der­ly­ing in­stru­ments, provided the in­form­a­tion in ques­tion is com­mu­nic­ated to the trad­ing ven­ue or DLT trad­ing fa­cil­ity on the basis of an agree­ment in ac­cord­ance with Art­icle 32 para­graph 3 Fin­MIA⁴¹ or with­in the frame­work of an ex­change of in­form­a­tion between FINMA and the com­pet­ent for­eign su­per­vis­ory au­thor­ity if:

1.

said trans­ac­tions are ex­ecuted by the branch of a Swiss se­cur­it­ies firm or by a for­eign ad­mit­ted par­ti­cipant, and

2.

the branch or the for­eign par­ti­cipant is au­thor­ised to trade by the rel­ev­ant for­eign su­per­vis­ory au­thor­ity and is re­quired to re­port in the cor­res­pond­ing state or in its state of dom­i­cile;

b.

trans­ac­tions in for­eign se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity in Switzer­land and in de­riv­at­ives with such se­cur­it­ies as their un­der­ly­ing in­stru­ments, which trans­ac­tions are ex­ecuted on a re­cog­nised for­eign trad­ing ven­ue or DLT trad­ing fa­cil­ity.

⁵Third parties may be in­volved in re­port­ing.

(Art. 52 para. 1 Fin­IA)

¹A for­eign fin­an­cial in­sti­tu­tion is any com­pany or­gan­ised in ac­cord­ance with for­eign le­gis­la­tion and which:

a.

pos­sesses au­thor­isa­tion abroad as a fin­an­cial in­sti­tu­tion;

b.

in the com­pany name, in the de­scrip­tion of its busi­ness pur­pose or in com­mer­cial doc­u­ments uses terms in ac­cord­ance with Art­icle 13 para­graph 2 Fin­IA or a term of sim­il­ar mean­ing; or

c.

op­er­ates a fin­an­cial in­sti­tu­tion with­in the mean­ing of Art­icle 2 para­graph 1 Fin­IA.

²If the for­eign fin­an­cial in­sti­tu­tion is ef­fect­ively man­aged from Switzer­land or if it ex­ecutes its trans­ac­tions ex­clus­ively or pre­dom­in­antly in or from Switzer­land, it must be or­gan­ised in ac­cord­ance with Swiss le­gis­la­tion and be sub­ject to the pro­vi­sions gov­ern­ing do­mest­ic fin­an­cial in­sti­tu­tions.⁴²

(Art. 52 para. 1 and 53 Fin­IA)

¹The for­eign fin­an­cial in­sti­tu­tion must have:

a.

au­thor­isa­tion and su­per­vi­sion at least equi­val­ent to the au­thor­isa­tion and su­per­vi­sion re­ques­ted for the branch in Switzer­land;

b.

col­lat­er­al which is com­par­able to that in ac­cord­ance with:

1.

Art­icles 22 and 23 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions which man­age as­sets or act as a trust­ee (Art­icle 52 para­graph 1 let­ter a Fin­IA),

2.

Art­icles 28, 29, 36 and 37 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions which per­form fund busi­ness, port­fo­lio man­age­ment for col­lect­ive in­vest­ment schemes or port­fo­lio man­age­ment for oc­cu­pa­tion­al pen­sion schemes (Art­icle 52 para­graph 1 let­ter b Fin­IA),

3.

Art­icles 45–47 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions which trade se­cur­it­ies, ex­ecute trans­ac­tions or man­age cli­ent ac­counts (Art­icle 52 para­graph 1 let­ters c–e Fin­IA).

²The branch must:

a.

com­ply with the stand­ards of the FinSA⁴³ if it provides fin­an­cial ser­vices in ac­cord­ance with Art­icle 3 let­ter c FinSA;

b.

com­ply with the con­di­tions in ac­cord­ance with Art­icle 20 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions which man­age as­sets or act as a trust­ee (Art­icle 52 para­graph 1 let­ter a Fin­IA);

c.

be sub­ject to su­per­vi­sion:

1.

in ac­cord­ance with Art­icles 61 and 62 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions which man­age as­sets or act as a trust­ee,

2.

in ac­cord­ance with Art­icles 61 and 63 Fin­IA in the case of for­eign fin­an­cial in­sti­tu­tions in ac­cord­ance with Art­icle 52 para­graph 1 let­ters b–e Fin­IA.

³The for­eign fin­an­cial in­sti­tu­tion may only ap­ply for entry of the branch in the com­mer­cial re­gister when FINMA has gran­ted said fin­an­cial in­sti­tu­tion au­thor­isa­tion to es­tab­lish the branch.

(Art. 52 para. 1 and 53 Fin­IA)

¹If a for­eign fin­an­cial in­sti­tu­tion es­tab­lishes mul­tiple branches in Switzer­land, it must:

a.

ob­tain au­thor­isa­tion for each one;

b.

des­ig­nate one among them which is re­spons­ible for re­la­tions:

1.

with FINMA and the su­per­vis­ory or­gan­isa­tion in the case of Art­icle 52 para­graph 1 let­ter a Fin­IA,

2.

with FINMA in the case of Art­icle 52 para­graph 1 let­ters b–e Fin­IA.

²These branches must jointly meet the con­di­tions of the Fin­IA and the present Or­din­ance. An audit re­port is suf­fi­cient.

(Art. 52 para. 1 and 53 Fin­IA)

¹Branches may draw up their an­nu­al and in­ter­im ac­counts in ac­cord­ance with the pro­vi­sions which ap­ply to the for­eign fin­an­cial in­sti­tu­tion, provided they sat­is­fy in­ter­na­tion­al stand­ards of ac­count­ing.

²Claims and li­ab­il­it­ies must be stated sep­ar­ately:

a.

in re­spect of the for­eign fin­an­cial in­sti­tu­tion;

b.

in re­spect of com­pan­ies act­ive in the fin­an­cial sec­tor or real es­tate firms if:

1.

the for­eign fin­an­cial in­sti­tu­tion forms an eco­nom­ic unit with them, or

2.

it is to be as­sumed that the for­eign fin­an­cial in­sti­tu­tion is de jure or de facto ob­liged to provide as­sist­ance to group com­pan­ies.

³Para­graph 2 also ap­plies to off-bal­ance-sheet busi­ness.

⁴A branch shall send its an­nu­al and in­ter­im ac­counts:

a.

to the su­per­vis­ory or­gan­isa­tion for sub­mis­sion to FINMA in the case of Art­icle 52 para­graph 1 let­ter a Fin­IA;

b.

to FINMA in the case of Art­icle 52 para­graph 1 let­ters b–e Fin­IA.

⁵Pub­lic­a­tion is not re­quired.

(Art. 52 para. 1 and 53 Fin­IA)

¹The audit firm shall send its audit re­port:

a.

to the su­per­vis­ory or­gan­isa­tion for sub­mis­sion to FINMA in the case of Art­icle 52 para­graph 1 let­ter a Fin­IA;

b.

to FINMA in the case of Art­icle 52 para­graph 1 let­ters b–e Fin­IA.

²It shall provide a copy to the branch man­ager re­spons­ible.

³The branch will send the copy of the audit re­port to the unit of the for­eign fin­an­cial in­sti­tu­tion which is re­spons­ible for the busi­ness activ­it­ies of the branch.

(Art. 52 para. 1 and 53 Fin­IA)

The for­eign fin­an­cial in­sti­tu­tion shall ob­tain the ap­prov­al of FINMA be­fore clos­ing a branch.

¹ The rep­res­ent­a­tion of a for­eign fin­an­cial in­sti­tu­tion that provides fin­an­cial ser­vices in ac­cord­ance with Art­icle 3 let­ter c of the FinSA⁴⁵ must:

a.

com­ply with the pro­vi­sions of the FinSA;

b.

enter its cli­ent ad­visers in a re­gister of ad­visers in ac­cord­ance with Art­icle 28 of the FinSA if they do not ex­clus­ively provide their ser­vices in Switzer­land to pro­fes­sion­al or in­sti­tu­tion­al cli­ents in ac­cord­ance with Art­icle 4 of the FinSA.

² The pro­hib­i­tion on es­tab­lish­ing a rep­res­ent­a­tion of a for­eign fund man­age­ment com­pany in ac­cord­ance with Art­icle 58 para­graph 2 of the Fin­IA⁴⁶ ap­plies ex­clus­ively to the rep­res­ent­a­tion's activ­it­ies in re­la­tion to the ad­min­is­tra­tion and man­age­ment of in­vest­ment funds.

³ If a for­eign fin­an­cial in­sti­tu­tion es­tab­lishes two or more rep­res­ent­a­tions in Switzer­land, it must ob­tain au­thor­isa­tion for each rep­res­ent­a­tion.⁴⁷

⁴ The for­eign fin­an­cial in­sti­tu­tion must ob­tain ap­prov­al from FINMA be­fore clos­ing a rep­res­ent­a­tion.⁴⁸

(Art. 61 para. 1 and 2 Fin­IA)

¹For do­mest­ic port­fo­lio man­agers and trust­ees which form part of a fin­an­cial group FINMA can provide that on­go­ing su­per­vi­sion is per­formed ex­clus­ively with­in the frame­work of group su­per­vi­sion. This is con­di­tion­al on the group com­pany be­ing closely in­teg­rated in­to the risk man­age­ment, in­tern­al con­trol and in­tern­al audit­ing struc­tures of the fin­an­cial group.

²FINMA shall pub­lish a list of the group com­pan­ies mon­itored by it in ac­cord­ance with para­graph 1.

(Art. 61 para. 2 and 62 Fin­IA)

¹The su­per­vis­ory or­gan­isa­tion shall veri­fy on an on­go­ing basis wheth­er the en­tit­ies un­der its su­per­vi­sion spe­cific­ally:

a.

sat­is­fy the re­quire­ments of the Fin­IA;

b.

ob­serve the du­ties pur­su­ant to the Anti-Money Laun­der­ing Act of 10 Oc­to­ber 1997⁴⁹ (AMLA);

c.

ob­serve the du­ties pur­su­ant to the FinSA⁵⁰ if they provide fin­an­cial ser­vices in ac­cord­ance with Art­icle 3 let­ter c FinSA;

d.

ob­serve the du­ties pur­su­ant to the CISA⁵¹ if they per­form activ­it­ies fall­ing un­der the CISA.

²FINMA shall provide the su­per­vis­ory or­gan­isa­tions with guidelines for audit­ing and su­per­vi­sion. In par­tic­u­lar, it shall set down for the su­per­vis­ory or­gan­isa­tions a sys­tem of risk as­sess­ment as well as min­im­um re­quire­ments to be met by the su­per­vi­sion concept. It shall con­sult with the su­per­vis­ory or­gan­isa­tions be­fore­hand.

³Audit ac­tions and their find­ings shall be re­cor­ded in audit re­ports. Audit re­ports shall be pub­lished in an of­fi­cial lan­guage. Ex­emp­tions through audit firms in ac­cord­ance with Art­icle 43k FIN­MASA⁵² re­quire the con­sent of the su­per­vis­ory or­gan­isa­tion.

⁴If the su­per­vis­ory or­gan­isa­tion su­per­vises a fin­an­cial in­sti­tu­tion whose activ­ity re­quires a high­er au­thor­isa­tion level on ex­ceed­ing thresholds, the su­per­vis­ory or­gan­isa­tion will mon­it­or com­pli­ance with these thresholds and no­ti­fy FINMA and the fin­an­cial if they are ex­ceeded.

⁵The is­su­ance of rul­ings is re­served to FINMA. FINMA shall in­ter­vene in the on­go­ing su­per­vi­sion by the su­per­vis­ory or­gan­isa­tion if this is ne­ces­sary to en­force the fin­an­cial mar­ket acts in ac­cord­ance with Art­icle 1 para­graph 1 FIN­MASA.

⁶ If man­agers of col­lect­ive as­sets or fund man­age­ment com­pan­ies act as trust­ees, FINMA shall ex­er­cise day-to-day su­per­vi­sion over their activ­it­ies. The same audit firm shall be ap­poin­ted aud­it­or as for activ­it­ies as a man­ager of col­lect­ive as­sets or fund man­age­ment com­pany un­der Art­icle 63 para­graph 1 Fin­IA.⁵³

(Art. 5 and 62 Fin­IA)

With re­spect to the su­per­vi­sion of port­fo­lio man­agers and trust­ees, FINMA and the su­per­vis­ory or­gan­isa­tions will co­ordin­ate their su­per­vis­ory activ­it­ies in or­der to avoid du­plic­a­tion.

(Art. 62 para. 1 Fin­IA)

Where the su­per­vis­ory or­gan­isa­tion does not it­self con­duct the audit of su­per­vised en­tit­ies, it will en­sure that:

a.

the ap­poin­ted audit firm is cor­rectly man­dated and au­thor­ised in ac­cord­ance with Art­icle 43k FIN­MASA⁵⁴;

b.

the ap­poin­ted audit firm im­ple­ments the guidelines provided by FINMA;

c.

the areas audited and the cor­res­pond­ing depths of audit of risk as­sess­ments are com­men­sur­ate with its su­per­vi­sion concept; and

d.

it is in­formed im­me­di­ately of any ir­reg­u­lar­it­ies.

(Art. 62 para. 2 and 3 Fin­IA)

¹When de­fin­ing the audit fre­quency and the in­tens­ity of su­per­vi­sion, the su­per­vis­ory or­gan­isa­tion shall be guided by the risks as­so­ci­ated with the activ­ity of those su­per­vised and the risks as­so­ci­ated with their or­gan­isa­tion.

²In years in which no reg­u­lar audit takes place, the su­per­vis­ory au­thor­ity shall col­lect stand­ard­ised data on the risks as­so­ci­ated with those su­per­vised.

³It shall as­sess the self-de­clared data col­lec­ted and take fur­ther meas­ures where ne­ces­sary.

⁴FINMA shall set down for, and in con­sulta­tion with, the su­per­vis­ory or­gan­isa­tion guidelines for con­duct­ing an as­sess­ment in ac­cord­ance with para­graphs 1–3.

(Art. 61 para. 3 and 63 Fin­IA)

¹The audit firm shall veri­fy wheth­er the en­tit­ies un­der its su­per­vi­sion spe­cific­ally:

a.

sat­is­fy the re­quire­ments of the Fin­IA;

b.

ob­serve the du­ties pur­su­ant to the AMLA⁵⁵;

c.

ob­serve the du­ties pur­su­ant to the FinSA⁵⁶ if it provides fin­an­cial ser­vices in ac­cord­ance with Art­icle 3 let­ter c FinSA;

d.

ob­serve the du­ties pur­su­ant to the CISA⁵⁷ if they per­form activ­it­ies fall­ing un­der the CISA.

²Su­per­vised en­tit­ies for which the audit firm sub­mits an an­nu­al risk ana­lys­is are ex­emp­ted from the duty to re­port on their busi­ness activ­ity's com­pli­ance in ac­cord­ance with Art­icle 63 para­graph 3 Fin­IA.

(Art. 63 Fin­IA)

The audit firms of su­per­vised en­tit­ies which co­oper­ate in ac­cord­ance with Art­icle 14, 27 or 35 Fin­IA must them­selves co­oper­ate closely.

Art­icle 24 BankA⁵⁸ ap­plies by ana­logy to fund man­age­ment com­pan­ies and se­cur­it­ies firms.

(Art. 73 Fin­IA)

The re­peal and amend­ment of oth­er le­gis­lat­ive in­stru­ments are set out in the An­nex.

(Art. 74 Fin­IA)

¹Port­fo­lio man­agers and trust­ees which un­til entry in­to force of the Fin­IA were su­per­vised by FINMA as fin­an­cial in­ter­me­di­ar­ies dir­ectly sub­or­din­ated to it pur­su­ant to the AMLA⁵⁹ are no longer re­quired to be af­fil­i­ated to a self-reg­u­lat­ory or­gan­isa­tion in ac­cord­ance with Art­icle 24 AMLA if, with­in one year of entry in­to force of the Fin­IA, they:

a.

re­ceive con­firm­a­tion from a su­per­vis­ory or­gan­isa­tion that they are sub­ject to su­per­vi­sion in ac­cord­ance with Art­icle 7 para­graph 2 Fin­IA; and

b.

sub­mit an au­thor­isa­tion ap­plic­a­tion to FINMA.

²They shall sub­mit a re­port on their busi­ness activ­ity's com­pli­ance with the pro­vi­sions of the AMLA:

a.

to the su­per­vis­ory or­gan­isa­tion pri­or to be­ing sub­ject to su­per­vi­sion in ac­cord­ance with Art­icle 7 para­graph 2 Fin­IA; or

b.

to the self-reg­u­lat­ory or­gan­isa­tion pri­or to af­fil­i­ation ac­cord­ance with Art­icle 14 AMLA.

(Art. 74 Fin­IA)

¹Art­icle 5 para­graph 2 Fin­IA is not ap­plic­able to fin­an­cial in­sti­tu­tions which on entry in­to force of the Fin­IA are already entered in the com­mer­cial re­gister.

²Fin­an­cial in­sti­tu­tions which provide ser­vices in ac­cord­ance with the FinSA⁶⁰ must be af­fil­i­ated to the om­buds­man's of­fice with­in six months of the Fed­er­al De­part­ment of Fin­ance re­cog­nising or es­tab­lish­ing for them an om­buds­man's of­fice in ac­cord­ance with Art­icle 84 FinSA. The peri­od is deemed met on sub­mis­sion of the ap­plic­a­tion.

³Fin­an­cial in­sti­tu­tions that have their re­gistered of­fice abroad and by reas­on of a branch or rep­res­ent­a­tion in Switzer­land already hold au­thor­isa­tion are not re­quired to sub­mit a new ap­plic­a­tion for au­thor­isa­tion. They must sat­is­fy the leg­al re­quire­ments with­in one year of entry in­to force.

⁴Fin­an­cial in­sti­tu­tions that have their re­gistered of­fice abroad and by reas­on of a branch or rep­res­ent­a­tion in Switzer­land are newly re­quired to ob­tain au­thor­isa­tion pur­su­ant to the Fin­IA shall re­port to FINMA with­in six months of entry in­to force. They must sat­is­fy the leg­al re­quire­ments and sub­mit an ap­plic­a­tion for au­thor­isa­tion with­in three years of entry in­to force. They may con­tin­ue their activ­it­ies un­til a de­cision on au­thor­isa­tion is made.

⁵Art­icle 77 para­graph 3 is not ap­plic­able to branches which on entry in­to force of the Fin­IA are already entered in the com­mer­cial re­gister.

⁶Ex­emp­tions gran­ted by FINMA based on Art­icle 18 para­graph 3 CISA⁶¹ in the ver­sion of 28 Septem­ber 2012⁶² to man­agers of col­lect­ive in­vest­ment schemes re­main val­id un­der Art­icle 7 of the present Or­din­ance.

This Or­din­ance enters in­to force on 1Janu­ary 2020.