The Swiss Funds Association together with the Swiss Banking Association and Swiss Insurance Association is working on a "Financial Sector Masterplan” in order to grow its share of the global hedge fund market. Currently, Switzerland boasts around 30 percent of the global fund-of-funds market.
The goals of the plan include creating new “legal forms” for investments in hedge funds and developing “internationally recognised” supervision of hedge fund managers in order to attract more institutional investors. In a recent report, the Swiss Federal Banking Commission (SFBC) noted the “limited opportunity” for managers of foreign hedge funds to be licensed by the SFBC, under current rules. It recommended a revision of the Swiss Collective Investment Schemes Act (CISA) with the aim of “improving regulatory incentives for hedge fund managers to settle in Switzerland.”
The Swiss Funds Association is also calling for the “tax disadvantages” faced by investors in Switzerland to be lifted and aligned with other jurisdictions, and for the funds approval process to be simplified within the CISA legislation.
The Swiss funds industry has been aggressively targeting the hedge fund since the implementation of CISA in January last year. The Act offers promoters a variety of structures aimed at both retail and professional investors.
In 2007, Switzerland’s hedge fund sector enjoyed a strong performance, generating average returns of 10.1 percent, according to the Hedge Fund Research Inc. HRFI Fund-of-Fund index.
For more information about CISA, including explanations of the various fund structures, details of approval procedures, investment restrictions and taxation, check out the Swiss Funds Association publication: A Guide to CISA (24 pages).