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On 9 June 2021, the Swiss Council of States adopted the new legal provisions on the limited qualified investor fund ("L-QIF") with the intention to enhance Switzerland’s position as a location for funds and asset management.
The new provisions states that there will be an exemption for certain collective investment funds to obtain approval from the Swiss Financial Market Supervisory Authority ("FINMA"). However, L-QIFs are only for qualified investors such as asset managers of regulated financial entities, institutional and professional investors (as per the Collective Investment Schemes Act). In addition, these funds must be managed by institutions licensed by FINMA.
L-QIFs have the reputation of having international grade quality and security, whilst being cheaper and faster to set up. Having said so, with this structure, Swiss linked qualified investors have an added benefit of having an alternative entry into similar foreign structures like the Reserved Alternative Investment Fund (”RAIF”) which is domiciled in Luxembourg. With the newly adopted L-QIFs, it puts Switzerland in a competitive position in the global fund market for those looking to set-up collective investment schemes.
