The Swiss occupational pension supervisory commission OAK BV is urging pension institutions including pension funds to check whether external asset managers still need the approval from the Financial Market Supervisory Authority (FINMA) to manage so-called collective assets.
According to the Federal Act on Financial Institutions (FinIA), the two categories of managers of collective assets include asset managers of occupational pension schemes and of collective investment schemes.
OAK BV is also recommending investment foundations, vested benefit foundations (Freizügigkeitseinrichtung) that receive the benefits of members exiting a pension fund without joining another scheme, institutions managing third pillar pensions, and welfare funds commissioning an external manager to run all or part of their pension assets to find out if managers require a FINMA license to run collective assets.
Asset managers that received approval by OAK BV until 2019 have to submit a request to FINMA for authorisation to operate by the end of this year, according to article 74 of the FinIA regulation.
Until 2019, in fact, OAK BV was responsible for granting authorisation to managers of pension assets, including external managers such as real estate portfolio managers that had concluded an asset management agreement with an occupational pension scheme to buy and sell properties.
The OAK BV approval was based on the article 48f paragraph 5 of the Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans - BVV 2.
The FinIA and the Federal Act on Financial Services (FinSA) came into force in 2020, transferring the responsibility to grant approval to managers of pension assets to FINMA.
Since the FinIA came into force, managers running pension fund assets also require a license from FINMA.
According to the supervisory authority, a foreign manager of collective assets employing staff in Switzerland who permanently manage collective investment schemes or the assets of occupational pension schemes in or from Switzerland on a professional basis must also obtain authorisation from FINMA before establishing a branch.
Institutions that manage pension fund assets in accordance with Article 34 paragraph 2 of the Ordinance on Financial Institutions (FinIO), and after the FinIA regulation came into force, may only start their business if they receive a license from FINMA.
The Article 34 of the FinIO regulation refers to the thresholds for the assets of occupational pension schemes managed by a manager of collective assets.
Overall all institutions managing assets on behalf of pension funds are subject to authorisation. Managers of collective assets that exclusively manage real estate on behalf of pension funds require a license from FINMA.