Regulatory principles under the old law
  • How were trustees previously regulated?

    Previously, trustees were not regulated in Switzerland (except in the field of AML). Financial institutions within the meaning of AML are obliged to comply with the Anti-Money Laundering Act and for this purpose must either report to FINMA or join a self-regulatory organisation (SRO).

    However, trustees may be subject to foreign supervision depending on the applicable law.

Regulating principles under FinSA&FinIA
  • Who is considered a "trustee" under the FinIA?

    A trustee is a person who, on the basis of a trust deed within the meaning of the Hague Convention on trusts, professionally manages or disposes specified assets for the benefit of the beneficiaries or for a specific purpose (Art. 17 para. 2 FinIA).

    For the application of the Convention, the term “trust” means “a legal arrangement created by a person, the settlor, by living or in the event of death, in which assets has been placed under the supervision of a trustee for the benefit of a beneficiary or for a particular purpose” (Article 2(1) of the Hague Convention on Trusts).

  • Are trustees subject to the FinSA?

    Trustees are subject to FinSA if they provide financial services within the meaning of Art. 3 let. c FinSA on a commercial basis in Switzerland or for clients in Switzerland (“To whom does the FinSA apply?“). Pure trustee activities, however, are not considered as financial services. Nor does the mandate of an external asset manager mean that the trustee is also subject to the FinSA.

  • Are trustees subject to the FinIA?

    A professional trustee is considered a financial institution pursuant to Art. 2 para. 1 let. b FinIA. In this case, trustees must obtain a FINMA licence (Art. 5 para. 1 FinIA). Trustees who also want to act as asset managers need an additional licence for this and vice versa (Art. 6 FinIA and 20 FinIO); cf.: “FINMA licence“.  

  • When are trustees professionally active?

    Trustees are professional pursuant to Art. 19 FinIO if they (alternatively):

    a) generate gross proceeds of more than CHF 50,000 per calendar year;

    b) enter into business relations with more than 20 contracting parties per calendar year which are not limited to a single activity or maintain
    at least 20 such relations per calendar year;

    c) have unlimited control over third-party assets exceeding CHF 5 million at any time;

  • Which trustees are subject to FinIA?

    Trustees domiciled or resident in Switzerland who operate in Switzerland or from Switzerland (Art. 18 para. 1 FinIA in conjunction with Art. 2 FinIO) are, in principle, subject to the FinIA.

    Foreign trustees are subject to the FinIA if they have a branch in Switzerland (Art. 52 para. 1 let. a FinIA), establish a permanent establishment here (Art. 58 FinIA) or are, in fact, managed in Switzerland (de facto branch; see: Ruling Federal Supreme Court 130 II 351, no. 5.1).

  • Are there any exceptions to being considered a trustee under FinIA?

    The exceptions are listed in Art. 2 para. 2 FinIA. Trustees who only manage assets of persons economically or family-related to them or who only manage assets within the framework of employee participation plans are excluded (Art. 2 para. 2 let. a and b FinIA). Companies or units of a group that provide financial services for other companies or units of the same group or render services as trustees are regarded as economically connected (Art. 3 FinIO). For example, relatives, spouses or persons who live with the trustee in a long-term partnership are regarded as family members (Art. 4 para. 1 D-FinIO). Further, family ties exist where trustees manage specific assets for the benefit of persons who are linked to each other by family ties, where trustees are directly or indirectly controlled by third parties who are linked to the persons by family ties or by a trust, foundation or similar legal entity established by a person who is linked to each other by family ties (art. 4 para. 2 FinIO). This also applies if, in addition to family members, institutions with a public or charitable purpose are also beneficiaries (Art. 4 para. 3 FinIO).

  • Do protectors also fall under FinIA?

    In general, protectors do not fall under FinIA. Whether a protector is subject to FinIA depends on his/her powers. The power itself to replace the trustee or to exercise veto rights over investment or distribution decisions by the trustee does not mean that the protector falls under FinIA (see: FDF explanatory report on FinSA, FinIO and AOV, p. 82, with reference to FINMA Circular 2011/1, activity as financial intermediary under the AML).

  • Do foundation board members also fall under FinIA?

    It is assumed that, foundation board members do not fall under FinIA. The different treatment of trustees and foundation board members is surprising since the functions may be similar or identical depending on the applicable law.

  • What are the licensing requirements for trustees?

    In general, the licensing requirements pursuant to Art. 9 f. of the FinIA have to be met (cf.: “FINMA License“. In addition, trustees must, in particular, meet the following requirements:

    a) Trustees domiciled or resident in Switzerland must be organised as a self-employed person, a commercial company or a cooperative and
    are obliged to enter themselves in the commercial register (Art. 18 FinIA).

    b) The trustee’s task is to manage specific assets. He must ensure that these assets retain their value and are used for a specific purpose
    (Art. 19 para. 2 FinIA).

    c) In general, the management of a trustee must consist of at least two qualified persons (Art. 20 Para. 1 FinIA), but if appropriate
    measures are taken, it can consist of only one qualified person (Art. 20 Para. 2 FinIA; cf.: “How must the management of an asset manager be organised?“).

    d) Trustees must have an appropriate risk management system and effective internal control system that, among other things, ensures
    compliance with legal and internal regulations (Art. 21 para. 1 FinIA; cf.: “What requirements must asset managers meet with regard to risk management and internal control?“).

    e) The minimum capital of trustees must amount to CHF 100,000 and be paid up in cash (Art. 22 para. 1 FinIA, cf. ” What are the minimum capital and equity requirements for asset managers?“).

    f) Trustees must have adequate collateral or take out professional indemnity insurance (Art. 22 para. 2 FinIA).

    g) Trustees must have adequate own funds at their disposal. These must always amount to at least one-quarter of the fixed costs of the
    most recent annual accounts, up to a maximum of CHF 10 million (Art. 23 FinIA; cf.: What are the minimum capital and equityrequirements for asset managers?“.

  • What is the supervisory regime for trustees?

    The supervisory regime for trustees is the same as for asset managers. Authorisation to carry out the activity is granted by FINMA, ongoing supervision is carried out by supervisory organisations , which in turn are authorised and supervised by FINMA (Art. 61 para. 1 FinIA); cf.: «What is the supervisory regime for asset managers?»).

  • What supervisory audit regime does FinIA provide for trustees?

    Trustees must engage an audit firm pursuant to Art. 43k para. 1 FINMASA to conduct a supervisory audit unless this is conducted by the relevant supervisory organisation itself (Art. 62 para. 1 FinIA).

    Financial institutions are audited on an annual basis. However, the audit frequency for trustees can be increased to a maximum of four years (Art. 62 Para. 2 FinIA). See: “At what intervals do the supervisory audits take place??

Transition periods

You need support? Get advice from our experts.

We support you in all matters relating to the new laws, e.g. with the adaptation of your existing internal directives and contracts or in the licensing process with FINMA.

We use cookies in order to help you using this website and to enhance its range of functions – please refer to our privacy policy for more information. By continuing to use our website without changing your browser settings, you consent to our use of cookies. You may, however, change your browser settings to delete and block cookies.This site uses cookies to improve your experience.

Accept →