Limited Qualified Investor Fund L-QIF
L-QIF – an innovation for the Swiss fund market
In a competitive international market, Swiss funds are often not investors’ first choice, especially as regards alternative investments for professional investors. High time and cost pressure in the approval process mean that even Swiss clients often favor foreign collective investment schemes over their Swiss counterparts. The Swiss limited qualified investor fund (L-QIF) is an innovative response to this problem.
It is intended to enhance Switzerland’s competitiveness as a location for funds and asset management by sparking a renewed increase in the number collective investment schemes launched in Switzerland. This is an opportunity that the Swiss financial sector must seize. Thanks to the L-QIF, qualified investors with strong links to Switzerland will no longer be forced to opt for foreign products. This is a good example of the Swiss fund industry’s efforts to evolve dynamically and, together with other targeted improvements in terms of taxation and international distribution, will play a part in continually strengthening Switzerland’s fund and asset management industry.
The core aim of the draft is to create a flexible form of collective investment scheme under Swiss law that is not subject to FINMA approval and can thus be launched much more quickly and cost-effectively. At the same time, this innovative product, which is to be available only to qualified investors, should guarantee the usual levels of quality and security. The asset manager or fund management company responsible for an L-QIF must be an institution supervised by FINMA. This indirect supervision takes due account of qualified investors’ need for protection. Both open-ended and closed-ended collective investment schemes in accordance with the CISA could be set up as L-QIFs. They would enjoy flexibility as regards their investment universe so as to offer investors the greatest possible choice. In addition, the tax treatment of L-QIFs as Swiss funds would be crucial to their success.
The draft was debated by the Council of States as the first chamber in summer 2021 before being adopted by the National Council’s Economic Affairs and Taxation Committee (EATC-N) at the start of September 2021 and debated by the National Council as the second chamber in its winter session. Both councils then resolved their differences to agree on a version that was adopted in a final vote on 17 December 2021. The Association actively lobbied in favor of the draft while parliament debated it. The Executive Board was supported in this regard by a working group made up of specialists from member institutions. The consultation on the revised CISO began on 23 September 2022. The consultation runs until 23 December 2022. The draft CISA and CISO can be expected to enter into force in the middle of 2023 at the earliest.
23 December 2022(the document is not available in the current language Englisch, but in another language)
AMAS welcomes the decision in the National Council to introduce the innovative fund category L-QIF