To start with, one of the main challenges to be implemented this year are the changes to the fund documentation
- What is the legal background to these changes?
- What type of document needs to be updated?
- What type of document needs to be created?
1. Legal background to the new fund documentation requirements
Until 31 December 2019, the Collective Investment Schemes Act (CISA) regulated products (i.e., collective investments), participants, as well as the rules of conduct applicable to licensees.
The simultaneous entry into force of FinSA and FinIA has reshaped the Swiss financial landscape, in particular by refocusing the scope of the CISA on the product and on its original purpose: to provide the legal basis for collective investment schemes in Switzerland.
In this regard, the activities previously described in the CISA are now covered by a new legislative nomenclature with practical impacts on the framework in which the funds and asset managers operate. The concept of "distribution" has been abolished and replaced by the term "offer", implying new requirements. The terms "financial services" and "advertising" have also been integrated. It should be noted that while the notion of distribution has disappeared, the economic reality, namely the sale of Swiss and foreign collective investment schemes in Switzerland, remains relevant.
This paradigm shift from "distribution" to "offering" along with the new related organizational and due diligence requirements have a significant impact on the entire fund distribution chain and, of course, on the related documentation.
2. Update of the fund documentation
FinSA now details the obligations relating to the documentation and publication of the offer of financial instruments.
At the same time, as the professional organization representing the Swiss asset management industry, the Asset Management Association Switzerland (AMAS, formerly Swiss Funds & Asset Management Association, SFAMA) has adapted its self-regulation (Code of Conduct and model documents). The Swiss Financial Market Supervisory Authority (FINMA) recognized in September 2021 that the adapted AMAS self-regulation constitutes a minimum standard.