10 Mar 2011 Focus on Switzerland
As a natural draw for hedge funds seeking a receptive, tax-efficient domicile, Switzerland has an important part to play in the future of the hedge fund industry.
DOMINIQUE LECOCQ (DL): With a lighter regulatory framework and less onerous compliance obligations,
Switzerland emerges as an attractive alternative to the tighter regulated EU member states in the context of asset management. Managers of foreign collective investment schemes are not required to obtain a regulatory licence to act as managers and a licence is only required for managers of Swiss-based funds. The Swiss regulator has delegated a number of monitoring duties to the industry itself which has set out industry standards by way of self-regulation. Setting up management operations in
Switzerland is fairly straightforward. In relation to Switzerland hedge funds Swiss-based funds, the Swiss regulatory framework permits the structuring of hedge funds for retail investors and/or accredited investors without minimum investment threshold restrictions. This is a strong asset for marketing purposes. The fact that no minimum investment is required (even for hedge fund strategies) permits managers to easily list the fund on an exchange and create actively managed ETFs traded on secondary markets. If liquidity in secondary market trading is sought therefore, this lack of minimum investment thresholds renders Switzerland an extremely attractive alternative to other jurisdictions.