The Swiss national council, the lower house of the parliament, has given the green light to change the collective investment schemes act – Kollektivanlagengesetz KAG – paving the way to the introduction of a new fund category called Limited Qualified Investor Funds (L-QIFs) for qualified investors, including Pensionskassen.

The national council approved the amendments to the collective investment scheme act yesterday with 116 votes in favour, 67 against and nine abstentions.

The fund category aims to reinforce the Swiss fund market in the competition with European fund locations.

The L-QIFs should offer qualified investors, including Pensionskassen, asset manager firms and banks, an alternative to foreign investment products, and greater flexibility.

New investment funds established under the L-QIFs category, in fact, would not require approval from the Financial Market Supervisory Authority (FINMA), but institutions supervised by the authority would manage the funds.

The version of the new regulations approved by the national council diverges from the draft produced by the council of states, the upper house of the Parliament, passed in June, on two points.

It is the view of the national council that it would not be possible to pause the return of stakes in funds to investors for open collective investment schemes for more than five years. The council of states voted in favour of suspending the return for more than five years.

Finance Minister Ueli Maurer raised concerns about the decision of the council of states because “the established regulations relating to closed and open funds would be weakened.”

Moreover, the national council decided that within the framework of the Financial Institutions Act – Finanzinstitutsgesetzes – asset managers should also be able to manage L-QIFs.

The reviewed regulation has now been sent back to the council of states.

The Asset Management Association Switzerland (ASMA) is demanding the council of states sticks to its version of the law as it believes “it is not appropriate to consider independent asset managers as possible administrators of the new L-QIFs”.

This would unnecessarily weaken indirect supervision, an essential element for the new L-QIFs from an investor’s point of view, it added.

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