- AIFM Directive discriminates against non-EU managers, says Swiss report
- Industry seeks to negotiate reciprocity with Europe
Switzerland's Federal Council has released a report, (16 December), which notes that the Alternative Investment Fund Managers (AIFM) Directive (http://tinyurl.com/mkf36v) as currently proposed discriminates against non-EU managers, and expressing the concern that the directive would see fund managers leaving Switzerland with repercussions for the Swiss economy.
The broad-ranging report (http://tinyurl.com/yjtxcmb) on Switzerland's financial market policy notes that while Swiss banks are finding it "increasingly difficult or impossible" to offer wealth management services abroad from Switzerland, insurance companies, asset managers and funds providers are also encountering market-entry problems.
With regard the draft AIFM directive it argues: "If the rules in this directive are actually adopted it threatens to discriminate against non-member countries such as Switzerland. Specifically, this directive states that asset management cannot be delegated to managers outside of the EU, as their supervisory regulations are not recognised as being equivalent by the relevant EU bodies," and notes that the directive proposed only envisages recognition of non-members' regulations after a period of three years after the directive comes into effect, which, it says, "would bring a stop, at least temporarily, to all EU-registered funds that are administered in Switzerland."
The report adds that Switzerland is looking at a number of ways of ensuring continued market access, both through bilateral free-trade agreements and at multilateral (World Trade Organisation, and OECD) level, but that in relation to the European Union, "given the ongoing deepening of the Single European Market...alternative measures will have to be verified at a regulatory level to ensure the broadest possible market access conditions," i.e. that it would need to negotiate with the EU in order that the anticipated discriminations did not occur.
In a response the Swiss Funds Association, (https://www.sfa.ch/) which assisted the Federal Council in drawing up the report, said that it took into account "the core demands of the industry". With regard to the market access issue, it said it was "crucial for Switzerland to negotiate the necessary reciprocity and to secure freedom of movement with the EU in the area of collective investment schemes [i.e. an EU passport]", and that an "EU passport" should be available for:
- Fund management companies and asset managers of collective investment schemes
- Swiss (EU- compatible) securities funds pursuant to the CISA
- Swiss-domiciled securities funds pursuant to the CISA
- Swiss-domiciled asset managers of alternative investment funds
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