Portfolio managers and trustees

Portfolio managers and trustees are now considered financial institutions under the Federal Act on Financial Institutions (FinIA) and as such require a FINMA license. The ongoing (prudential) supervision of portfolio managers and trustees is carried out by a supervisory organization approved by FINMA.

To date, FINMA has approved the following four supervisory organizations (a further application is still pending):

  • Organisme de Surveillance des Institutes Financiers (OSIF) based in Geneva (approved on 6 July 2020)
  • Organisation de Surveillance Financière (OSFIN) based in Neuchâtel (approved on 6 July 2020)
  • Organisme de Surveillance pour Intermédiaires Financiers & Trustees (SO-FIT) based in Geneva (approved on 11 August 2020)
  • FINcontrol Suisse AG based in Zug (approved on 30 September 2020)

Depending on the time of commencement of the activity requiring a licence, portfolio managers and trustees (in addition to the existing obligation to join an anti-money laundering (AML) self-regulatory organisation under AML legislation) must join a supervisory organisation and submit an application to FINMA for authorisation as a financial institution as follows:

  • immediately if the activity is commenced after 31 December 2020
  • by 6 July 2021 (i.e., within one year of the first authorisation of a supervisory organisation) in the event of commencement of activities between 1 January 2020 and 31 December 2020
  • by 31 December 2022 (i.e. within three years of FinIA coming into force) if the activities were commenced prior to 1 January 2020

Portfolio managers and trustees who commence their activities requiring a license on or after 1 January 2021 must be affiliated with a supervisory organisation and have a FINMA license.

Client advisors

Client advisors within the meaning of the Federal Act on Financial Services (FinSA) are individuals who provide financial services on behalf of a financial services provider or who themselves provide financial services on a professional basis. This also includes, for example, investment advice. In contrast to a portfolio manager, an investment advisor does not perform any actual management activities for the client. Rather, his activity is limited to providing advice and personal recommendations relating to transactions in financial instruments. Client advisors are not regarded as financial institutions subject to authorization within the meaning of FinIA. Accordingly, they do not require a FINMA license and are not subject to ongoing supervision. However, client advisors acting professionally are financial service providers within the meaning of FinSA. As such, they must fulfil all obligations imposed by the FinSA on financial service providers. Client advisors of domestic financial service providers who are not subject to prudential supervision must be entered in a register of client advisors. The same applies to client advisors of foreign financial service providers, unless they are subject to ongoing supervision abroad or serve Swiss private clients.

To date, FINMA has approved the following two registration bodies for the client adviser register:

  • BX Swiss AG based in Berne (approval on 20 June 2020)
  • Association Romande des Intermédiaires Financiers (ARIF) based in Geneva (authorisation on 14 September 2020)

The six-month transition period has begun with the first registration of a registration body (on 20 June 2020). This means that the application for entry in the client adviser register must be submitted by 19 January 2021.