Swiss FINMA updates on licensing of portfolio managers

The Swiss Financial Market Supervisory Authority (FINMA) today published an update on the licensing of portfolio managers.

FINMA notes that at 31 December 2023 it has approved 1,149 (70%) of the licence applications from portfolio managers and trustees received before 31 December 2022, while 63 institutions (4%) have withdrawn their applications. The remaining 487 applications (26%) are more complex and will take longer to finalise.

If an institution that is continuously affiliated to a self-regulatory organisation has submitted its licence application to FINMA together with proof of its affiliation with a supervisory organisation (SO) before the end of the transitional period, it may continue to operate.

A large number of change requests requiring authorisation (994) were submitted in 2023, implying a significant workload for FINMA.

FINMA also reports that from now on trustees will be deemed to be operating on a commercial basis and require a licence if the trust assets exceed CHF 5 million at any time, because trust assets are economically separate from the trustee, i.e. they are assets belonging to third parties. Trustees who are henceforth obliged to obtain a licence in accordance with FinIA are required to submit a licence application before the end of 2024.

In the two-tier supervisory model for portfolio managers and trustees, the SOs are responsible for carrying out the ongoing supervision of portfolio managers and trustees. FINMA is responsible for approving any changes that affect licensing requirements, exercising intensive supervision and taking remedial action to restore the supervised institutions’ compliance with the law.

This division of responsibilities requires a considerable degree of coordination, particularly with five SOs currently authorised. The supervisory levy reflects the work by FINMA inherent in the two-tier supervisory model.