Swiss Cleantech Investments, Le Blog

Obligations of asset managers

a. Guarantee of proper business conduct

b. Duty of loyalty

• Safeguard of the clients’ interests

• Prevention of conflict of interests

• Investments in the client’s interest:

prohibition of churning

prohibition of front, parallel and after running

c. Exercise of due diligence

Asset managers must:

adapt their organizations

ensure investments are always in line with investment objectivesand

restrictions described in the contract

ensure adequate risk diversification

review the investment strategies periodically

Asset managers may:

not accept any assets of clients (exception: FINMA authorizationas a bank

or as a securities dealer)

delegate asset management tasks to third parties in the interest of the client

- selection, instruction and monitoring

- definition in writing of the delegated tasks

- qualifications of the third parties

- compliance with comparable rules of conduct

Swiss Asset Management Regulations for Financial Trust Companies

Obligations of asset managers

d. Disclosure obligations

Information on the existence of the code of conduct

Information on the risks associated with the investment objectives and restrictions agreed (information provided in a standardized form accepted

Information on any key changes in the asset manager’s organization

Reporting to the clients on the asset management, on a regular basis or on demand

reporting in compliance with customary standards in the industry i.e. calculation

method, selected period, etc …

Type, terms and elements of the remuneration defined in writing

Definition in writing of the ultimate destination of all inducements by third parties (e.g. retrocession, finder’s fees, custody fees…)

information on any conflict of interests that might arise as theresult of

accepting third party inducement

if possible, information on the calculation parameters of inducements

received or to be received, by type of products

at the request of the clients, disclosure of the amount of inducements

already received

Swiss Asset Management Regulations for Financial Trust Companies

Guidelines on asset management/Circular FINMA 2009/1

Purpose

• 01.01.09 Entry into force of the Circular FINMA 2009/1

• The Circular 2009/1 sets out minimum standards to guide professional organizations in drawing up their own self- regulation provisions, to be recognized by FINMA

• The circular 2009/1 defines minimum requirements (duty of loyalty, exercise of due diligence, disclosure obligations, renumeration)

• 7 professional organizations now have their self-regulating provisions on asset management (codes of conduct) recognized by FINMA (ARIF, OAR-G, GSCGI, ASG…)

Voluntary compliance with a code of conduct on asset management recognized by FINMA

Mandatory compliance

Independent asset managers offering collective investment schemes in the course of their asset management activities are required to comply with a code of conduct on asset management recognized by FINMA

Purpose of the Circular 2008/8 : defines the term «public advertising»

Distribution of publicly advertised collective investment schemes in or from Switzerland requires FINMA’s approval (circ 2008/8 n. 3 and 6)

Public advertising is not considered as such if it is exclusively addressed to qualified investors (circ 2008/8 n.10)

Qualified investors(Art. 10 al. 3 Federal act on collective investment schemes «CISA»):

• supervised financial intermediaries such as

- banks

- securities dealers

- fund management companies

- asset managers of collective investment schemes

Supervised insurance companies

High net worth individuals (financial assets of a least CHF 2 million) investors who entered into a written asset management agreement with a supervised financial intermediary (independent asset manager)

Qualified investors (art. 6 al. 2 Ordinance on collective investment schemes,

“CISO, Circular 2008/8 n.12)

Independent asset managers and investors who entered into a written agreement to the extent that:

a. the asset manager as financial intermediary is subject to the Money

Laundering Act (“MLA”)

b. the asset manager is subject to a professional code of conduct recognized as a minimum standard by FINMA; and

c. the asset management contract contains the recognized guidelines of a professional organization

Independent asset managers complying with these 3 requirements do not need

FINMA’s approval to distribute collective investment schemes

Swiss Asset Management Regulations for Financial Trust Companies

7, Rue de Hesse

1204 Geneva, Switzerland

Tel : +41 (0)22 566 82 44
Fax : +41 (0)22 320 39 42

Avantages

CREDIBILITE

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Crédibilité, stabilité, discrétion