This Act aims to protect investors and to ensure transparency and the proper functioning of the market for collective investment schemes.

¹ This Act governs the following, irrespective of their legal status:

a.³

collective investment schemes and persons who are responsible for the safekeeping of assets held in them;

b.⁴

foreign collective investment schemes which are offered in Switzerland;

c.-e.⁵

...

f.

persons who represent foreign collective investment schemes in Switzerland.⁶

² The following are not governed by this Act:

a.

institutions and ancillary institutions in the occupational pensions sector, including investment foundations;

b.

social security institutions and compensation funds;

c.

public authorities and institutions;

d.

operating companies which are engaged in business activities;

e.

companies which by way of a majority of the votes or by any another way bring together one or more companies to form a group under single management (holding companies);

f.

investment clubs whose members are in a position to manage their financial interests themselves;

g.

associations and foundations as defined in the Swiss Civil Code⁷;

h.⁸

...

^2bis ...⁹

³ Investment companies in the form of a Swiss company limited by shares are not governed by this Act, provided they are listed on a Swiss exchange, or provided that:¹⁰

a.¹¹

only shareholders as defined in Article 10 paragraphs 3 and 3^ter are entitled to participate in them; and

b.

their shares are registered.¹²

⁴ ...¹³

¹ Collective investment schemes are assets raised from investors for the purpose of collective investment, and which are managed for the account of such investors. The investment requirements of the investors are met on an equal basis.

² Collective investment schemes may be open or closed-ended.

³ The Federal Council may stipulate a minimum number of investors in accordance with the legal status and target group. It may authorise collective investment schemes for a single qualified investor (single investor fund) in accordance with Article 10 paragraph 3 in conjunction with Article 4 paragraph 3 letters b, e and f of the Financial Services Act of 15 June 2018¹⁵ (FinSA).^{16 17}

⁴ In the case of single investor funds, the fund management company and the investment company with variable capital (SICAV) may transfer the investment decisions to the single investor. The Swiss Financial Market Supervisory Authority (FINMA) may exempt them from the duty to obtain authorisation in accordance with Article 14 paragraph 1 of the Financial Institutions Act of 15 June 2018¹⁸ (FinIA) or from the duty to subject themselves to supervision recognised under Article 36 paragraph 3 of this Act.¹⁹

⁵ Collective investment schemes must have their registered office and head office in Switzerland.²⁰

¹ Open-ended collective investment schemes may be in the form of a contractual fund (Art. 25 et seq.) or SICAV (Art. 36 et seq.).

² With open-ended collective investment schemes, investors have either a direct or indirect legal entitlement, at the expense of the collective assets, to redeem their units at the net asset value.

³ Each open-ended collective investment scheme has its own fund regulations. In the case of contractual funds this is the collective investment contract (fund contract), and in the case of SICAVs it is the articles of association and the investment regulations.

¹ Closed-ended collective investment schemes may be in the form of a limited partnership for collective investment (LPCI, Art. 98-109) or an investment company with fixed capital (SICAF, Art. 110-118)²¹.

² In the case of closed-ended collective investment schemes, investors have neither a direct nor an indirect legal entitlement at the expense of the collective assets to the redemption of their units at the net asset value.

³ LPCIs²² are based on a company agreement.

⁴ SICAFs are based on articles of association and issue a set of investment regulations.

¹ Investors are natural and legal persons, as well as general and limited partnerships, which hold units in collective investment schemes.

² Collective investment schemes are open to all investors, except where this Act, the fund regulations or the articles of association restrict investor eligibility to qualified investors.

³ Qualified investors within the meaning of this Act are professional clients as defined in Article 4 paragraphs 3-5 or Article 5 paragraphs 1 and 4 FinSA²³:²⁴

^3bis ...²⁵

^3ter Qualified investors also include retail clients:

a.

for whom one of the following persons provides portfolio management or investment advice in accordance with Article 3 letter c numbers 3 and 4 FinSA within the scope of a permanent portfolio management or investment advice relationship:

1.

a financial intermediary in accordance with Article 4 paragraph 3 letter a FinSA,

2.

a foreign financial intermediary that is subject to prudential supervision in the same way as the financial intermediary under number 1,

3.

an insurance company pursuant to the Insurance Oversight Act of 17 December 2004²⁶ (IOA); and

b.

who have not declared in writing or in another form verifiable by text that they do not wish to be considered as such.²⁷

⁴ ...²⁸

⁵ The FINMA may fully or partially exempt collective investment schemes from certain provisions of the financial market acts within the meaning of Article 1 paragraph 1 of the Financial Market Supervision Act of 22 June 2007²⁹ (FINMASA), provided that they are exclusively open towards qualified investors and that the protective purpose of this Act is not impaired, specifically from the provisions concerning:³⁰

a.³¹

...

b.³²

...

c.

the requirement to produce a semi-annual report;

d.

the requirement to provide investors with the right to terminate their invest- ment at any time;

e.

the requirement to issue and redeem units in cash;

f.

risk diversification.

Units are claims against the fund management company conferring entitlement to the assets and income of the investment fund or interests in the investment company.

¹ The designation 'collective investment scheme' must not provide any grounds for confusion or deception, in particular in relation to the investments.

² Designations such as 'investment fund', 'investment company with variable capital', 'SICAV', 'limited partnership for collective investment' or 'LPCI', 'investment company with fixed capital'», 'SICAF', 'Limited Qualified Investor Fund' or 'L-QIF' may only be used for the relevant collective investment schemes governed by this Act.³³

¹ A limited partnership for collective investment (LPCI) is a partnership whose sole object is collective investment.¹³⁰ At least one member bears unlimited liability (general partner), while the other members (limited partners) are liable only up to a specified amount (limited partners' contribution).

² General partners must be companies limited by shares with their registered office in Switzerland. Companies limited by shares without authorisation as managers of collective assets may only be active as a general partner in one LPCI.¹³¹

^2bis The conditions for obtaining an authorisation as defined in Article 14 also apply to the general partners.¹³²

³ Limited partners must be qualified investors as defined in Article 10 paragraph 3 or 3^ter.¹³³

Unless this Act provides otherwise, the provisions of the Code of Obligations¹³⁴ concerning limited partnerships apply.

¹ The partnership exists on being entered in the Commercial Register.

² Notification of the facts to be entered or any amendments thereto must be signed by all general partners in the Commercial Register or submitted in writing together with notarised signatures.

The partnership name must contain a description of the legal status or its permitted abbreviation.

¹ The partnership agreement must contain provisions regarding:

a.

the partnership name and its registered office;

b.

the object;

c.

the company name and the registered office of the general partners;

d.¹³⁶

total limited partners' contribution, or the range of the limited partners' contribution (fluctuation band);

e.

the duration;

f.

the conditions of the limited partners' joining and departing;

g.

the maintenance of a register of limited partners;

h.

the investments, investment policy, investment restrictions, risk diversification, the risks associated with investment, and the investment techniques;

i.

the delegation of management and representation;

j.

the appointment of a custodian bank and a paying agent.

² The partnership agreement requires the approval and signature of all the partners on formation of the company.¹³⁷

³ ...¹³⁸

¹ Amendments to the partnership agreement require the consent and signature of all the partners.

² The partnership agreement may be amended by majority resolution, provided that:

a.

this is provided for in the partnership agreement; and

b.

the resolution is publicly notarised.

³ The partnership agreement amended by a majority resolution requires the signature of the general partners only.

¹ The partnership conducts investments in risk capital.

² The Federal Council may also permit other investments.

¹ The limited partners are entitled without the consent of the general partners to conduct other business transactions for their own account and on behalf of third parties and to participate in other companies.

² Unless the partnership agreement provides otherwise, the general partners may without the consent of the limited partners conduct other business transactions for their own account and on behalf of third parties and participate in other companies, provided this is disclosed and the interests of the LPCI are not impaired as a consequence.

¹ Where specified by the partnership agreement, the general partner may decide on the joining and departure of limited partners.

² This is subject to the provisions of the Code of Obligations¹⁴⁰ regarding the exclusion of owners of the limited partnership.

³ The Federal Council may prescribe compulsory exclusion. This shall be based on Article 82.

¹ The limited partners are entitled to inspect the business accounts of the partnership at any time. Business confidentiality with regard to the companies in which the LPCI¹⁴¹ invests shall be preserved.

² The limited partners are entitled to obtain information about the business performance of the partnership at least once every quarter.

The partnership shall appoint an audit company (Art. 126 et seq.).

¹ With respect to the financial statements of the partnership and the valuation of the assets, Article 88 et seq. apply accordingly.

² Internationally recognised standards must be observed.

The partnership is dissolved:

a.

by resolution of the owners;

b.

for the reasons set forth in this Act and in the partnership agreement;

c.

by order of FINMA in the cases specified in Article 133 et seq.

¹ SICAF is a company limited by shares pursuant to the Code of Obligations¹⁴² (Art. 620 et seq. CO):

a.

the sole object of which is the investment of collective capital;

b.

the shareholders of which are not required to be qualified pursuant to Article 10 paragraph 3; and

c.

which is not listed on a Swiss stock exchange.

² There must be an appropriate relationship between a SICAF's equity and its total assets. The Federal Council defines this relationship.¹⁴³

¹ The company name must contain the designation of its legal status or the abbreviation thereof (SICAF).

² In all other respects, the provisions of the Code of Obligations¹⁴⁴ regarding the name of companies limited by shares apply.

Unless this Act provides otherwise, the provisions of the Code of Obligations¹⁴⁵ concerning companies limited by shares apply.

¹ The share capital is fully paid up.

² The issuing of voting shares, participation certificates, dividend right certificates and preference shares is prohibited.

³ The Federal Council may specify compulsory redemption. This is laid down in Article 82.

The SICAF must appoint a custodian bank in accordance with Articles 72-74.

¹ A SICAF defines the investments, investment policy, investment restrictions, risk diversification, together with the risks associated with the investments, in the articles of association and in the investment regulations.

² The investments are subject to Article 69; Articles 64, 70 and 71 apply according- ly.

³ Resolutions to amend the investment regulations must be passed by a majority of votes at the general meeting.

With respect to the financial statements, Article 89 paragraph 1 letters a and c-i, paragraphs 2-4 and Article 90 apply accordingly in addition to the statutory provisions concerning accounting standards.

A SICAF shall appoint an audit company (Art. 126 et seq.).

¹ An L-QIF is a collective investment scheme that:

a.

is only open to qualified investors;

b.

in the event that it invests its funds directly in real estate, is open only to investors who are professional clients in accordance with Article 4 paragraph 3 letters a-h FinSA¹⁴⁹;

c.

is managed in accordance with Articles 118g and 118h; and

d.

has neither authorisation nor approval from FINMA and is not supervised by FINMA.

² It is subject to this Act unless it provides otherwise.

¹ A collective investment scheme that has authorisation or approval from FINMA may surrender this if:

a.

it meets the conditions set out in Article 118a paragraph 1 letters a−c; and

b.

it is ensured that the interests of the investors are safeguarded.

² The Federal Council shall regulate the details. It shall lay down the measures to ensure that the interests of investors are safeguarded.

The L-QIF may have the legal status of a contractual fund, a SICAV or an LPCI.

The following are not applicable to L-QIFs:

a.

the investment provisions set out in Articles 53-71 and 103;

b.

the provisions that grant FINMA the power to decide in individual cases or supervisory powers (Art. 7 para. 4 second sentence, 10 para. 5, 26 para. 1, 27, 39 para. 2, 44a para. 2, 47 para. 2, 74, 78 para. 4, 81 para. 2, 83 para. 3, 89 para. 4, 91, 95 para. 2, 96 para. 1 let. c, para. 2 let. c and para. 4, 109 let. c, 126, 132-134, 136-139 and 144).

¹ On the first page of the fund documents of an L-QIF and in advertisements for an L-QIF:

a.

the designation 'Limited Qualified Investor Fund' or 'L-QIF' must be used;

b.

state that the L-QIF has neither authorisation nor approval from FINMA and is not supervised by FINMA.

² The name of an L-QIF in the legal form of a SICAV or KmGK must contain the designation 'Limited Qualified Investor Fund' or its abbreviation 'L-QIF' and an indication of the relevant legal form.

³ An L-QIF may not be designated as a 'securities fund', 'real estate fund', 'other fund for traditional investments' or 'other fund for alternative investments'.

¹ The institution responsible for administration in accordance with Article 118g paragraph 1 or 118h paragraph 1, 2 or 4 shall notify the Federal Department of Finance (FDF) within 14 days of taking over or ceasing administration of an L-QIF. The Federal Council may determine what information the notification must contain.

² The FDF shall maintain a publicly accessible list of all L-QIFs and the institutions responsible for their administration in accordance with Article 118g paragraph 1 or 118h paragraph 1, 2 or 4.

³ The FDF may collect data on the business activities of the L-QIF from the L-QIF and the institutions responsible for administration in accordance with Article 118g paragraph 1 or 118h paragraph 1, 2 or 4 for statistical purposes.

⁴ The FDF may have this data collected by third parties or require the persons referred to in paragraph 3 to report it to it.

⁵ Article 144 paragraphs 2 and 3 apply by analogy.

¹ An L-QIF in the legal form of a contractual fund is managed by a fund management company.

² The fund management company may delegate the investment decisions under the conditions set out in Articles 14 paragraph 1 and 35 FinIA¹⁵⁰ to:

a.

a manager of collective assets in accordance with Article 2 paragraph 1 letter c FinIA;

b.

a foreign manager of collective assets if:

1.

they are subject to appropriate regulation and supervision in their country of domicile, and

2.

an agreement on cooperation and the exchange of information exists between FINMA and the competent foreign supervisory authority, insofar as such an agreement is required by foreign law.

³ The manager of collective assets may delegate investment decisions to persons in accordance with paragraph 2 of this provision subject to the conditions set out in Article 14 paragraph 1 and Article 27 paragraph 1 FinIA.

⁴ The fund contract must specify to whom the investment decisions are delegated.

¹ The administration and investment decision of an L-QIF in the legal form of a SICAV must be delegated to one and the same fund management company.

² The management of an L-QIF in the legal form of an LPCI must be delegated to a manager of collective assets.

³ The sub-delegation of investment decisions is governed by Article 118g paragraphs 2 and 3.

⁴ The management of an L-QIF in the legal form of an LPCI need not be delegated if the general partners are banks, insurance companies within the meaning of the IOA¹⁵¹, securities firms, fund management companies or managers of collective assets.

⁵ The articles of association or partnership agreement must specify to whom the management or administration is delegated.

¹ An audit company licensed by the Federal Audit Oversight Authority in accordance with Article 9a paragraph 1 of the Auditor Oversight Act of 16 December 2005¹⁵² must be appointed to audit the L-QIF.

² The annual accounts and if applicable their consolidated accounts of the L-QIF and each real estate company belonging to it must be audited by an audit firm under state oversight in accordance with the principles of the Code of Obligations ¹⁵³.

³ The same audit company shall be appointed for the audit as for the institution responsible for the administration in accordance with Article 118g paragraph 1 or 118h paragraph 1, 2 or 4.

⁴ Article 730b paragraph 2 of the Code of Obligations applies accordingly to confidentiality by the audit company.

⁵ The L-QIF shall bear the costs of the audit.

⁶ The Federal Council shall regulate the details of the audit. It may issue additional regulations on accounting, valuation, financial statements and publication requirements.

¹ In the case of an L-QIF in the legal form of a contractual fund, the fund management company shall draw up the fund contract and obtain the consent of the custodian bank.

² If the fund management company intends to amend the fund contract, it shall obtain the consent of the custodian bank in advance and publish the following in the L-QIF's media of publication:

a.

a summary of the significant amendments;

b.

a reference to the locations where the full wording of the contractual amendments may be obtained free of charge; and

c.

an indication of when the amendments will come into force.

³ Publication in accordance with paragraph 2 may be dispensed with if all investors are informed in writing or in another form verifiable by text of the wording of the amendments and the date on which the amendment enters into force.

⁴ The amendments to the fund contract shall come into force at the earliest:

a.

in the case of a contractual investment fund with a redemption option at any time: 30 days after publication pursuant to paragraph 2 or provision of information pursuant to paragraph 3;

b.

in the case of a contractual fund without the possibility of redemption at any time: on the day after the day on which the units may be surrendered in compliance with the contractual or regulatory redemption periods and deadlines if the fund contract were terminated on the 30th day after publication pursuant to paragraph 2 or the provision of information pursuant to paragraph 3.

⁵ If the contractual or regulatory notice period lasts longer than 30 days, the changes may come into force earlier than in accordance with paragraph 4 if all investors agree in writing or in another form verifiable by text, but no earlier than 30 days after publication in accordance with paragraph 2 or the provision of information in accordance with paragraph 3.

¹ Article 39a FinIA¹⁵⁴ applies accordingly to a change of custodian bank for an L-QIF in the legal form of the contractual fund.

² The change of custodian bank of an L-QIF in the legal form of a SICAV requires an agreement in writing or in another form verifiable by text. The change must be published immediately in the SICAV's media of publication.

In the case of an L-QIF in the legal form of the contractual fund or the SICAV, derogation from the duty to make payments in and out of the fund in cash in accordance with Article 78 may be allowed if it is provided for in the following document:

a.

in the case of an L-QIF in the legal form of the contractual fund: in the fund contract;

b.

in the case of an L-QIF in the legal form of a SICAV: in the investment regulations.

In the case of an L-QIF in the legal form of a contractual fund or SICAV, the fund management company may order a limited deferment of the repayment of the units in the interest of all investors.

¹ The investments permitted for the L-QIF must be set out in the following documents:

a.

in the case of an L-QIF in the legal form of a contractual fund: in the fund contract;

b.

in the case of an L-QIF in the legal form of a SICAV: in the investment regulations;

c.

in the case of an L-QIF in the form of an LPCI: in the partnership agreement.

² If the L-QIF invests in alternative investments, reference must be made to the particular risks associated with these investments in the designation, in the documents in accordance with paragraph 1 and in the advertising material.

³ The Federal Council shall regulate investment provisions and investment restrictions.

The risk diversification of an L-QIF must be described in the documents in accordance with Article 118n paragraph 1.

¹ If an L-QIF invests in real estate investments, Article 63 paragraphs 1-3 applies accordingly.

² At least two natural persons or one legal entity shall be appointed as valuation experts for real estate investments for the L-QIF.

³ The Federal Council shall regulate the derogations from paragraph 1 and the requirements for the valuation experts in accordance with paragraph 2. In particular, it shall regulate the derogations from the prohibition on takeovers and assignments in accordance with Article 63 paragraphs 2 and 3.

¹ The following are considered foreign open-ended collective investment schemes:

a.

assets that were accumulated on the basis of a fund contract or another agreement with similar effect for the purpose of collective investment and are managed by a fund management company with its registered office and main administrative office abroad;

b.

companies and schemes with their registered office and main administrative office located abroad whose purpose is collective capital investment and whose investors have a legal right with regard to the company itself, or with regard to a closely associated company, to the redemption of their units at the net asset value.

² Closed-end collective investment schemes are deemed to be companies and schemes with their registered office and main administrative office located abroad whose purpose is collective capital investment and whose investors have no legal right with regard to the company itself, or with regard to a closely connected company, to the redemption of their units at the net asset value.

¹ Foreign collective investment schemes must be approved by FINMA before they can be offered in Switzerland to non-qualified investors. The representative shall submit the documents requiring approval to FINMA.¹⁵⁵

² Approval is granted if:

a.¹⁵⁶

the collective investment scheme, fund management company or company, manager of collective assets and depository are subject to public supervision intended to protect investors;

b.¹⁵⁷

with regard to organization, investor rights and investment policy, the fund management company or company and the depository are subject to regulations which are equivalent to the provisions of this Act;

c.

the designation of the collective investment scheme does not provide grounds for confusion or deception;

d.¹⁵⁸

a representative and a paying agent are appointed for the offer of units in Switzerland;

e.¹⁵⁹

there is an agreement on cooperation and the exchange of information between FINMA and the foreign supervisory authorities relevant to the offer.

^2bis The representative and the paying agent may only end their mandate with FINMA's prior approval.¹⁶⁰

³ The Federal Council may specify a simplified, fast-track approval procedure for foreign collective investment schemes provided such investments have already been approved by a foreign supervisory authority, such arrangement being reciprocal.

⁴ Foreign collective investment schemes which are offered in Switzerland to qualified investors in accordance with Article 5 paragraph 1 FinSA¹⁶¹ do not require approval but must meet the conditions pursuant to paragraph 2 letters c and d at all times.¹⁶²

⁵ Employee share participation schemes in the form of foreign collective investment schemes that are offered exclusively to employees do not require approval.¹⁶³

¹ The paying agent must be a bank pursuant to the Federal Act on Banks and Savings Banks of 8 November 1934¹⁶⁴.

² The investors may request the issue and redemption of the units from the paying agent.

Assuming the mutual recognition of regulations and measures of an equivalent standard, the Federal Council may conclude international treaties which specify that collective investment schemes from the signatory countries merely have a duty to register rather than the duty to obtain approval.

¹ Foreign collective investment schemes may be offered in Switzerland to non-qualified investors and to qualified investors in Switzerland in accordance with Article 5 paragraph 1 FinSA¹⁶⁵ only if the fund management company or the company has first appointed a representative to undertake the duties specified in Article 124, subject to the provisions of Article 122.¹⁶⁶

² The fund management and the investment scheme company undertake to provide the representative with the information the latter may require for the performance of its tasks.

¹ The representative represents the foreign collective investment scheme with regard to investors and FINMA. The representative's powers of representation may not be restricted.

² The representative observes the statutory obligations to report, publish and inform, as well as the codes of conduct of industry bodies which have been declared to be the minimum standard by FINMA. The representative's identity must be disclosed in every publication.

¹ The place of performance for units of the foreign collective investment schemes offered in Switzerland is the registered office of the representative.¹⁶⁸

² It shall continue to be the registered office of the representative after the revocation of authorisation or following the dissolution of the foreign collective investment scheme.

³ The place of jurisdiction is:

a.

the registered office of the representative; or

b.

the registered office or place of residence of the investor.¹⁶⁹

¹ The following persons must appoint an audit company licensed by Federal Audit Oversight Authority under Article 9a paragraph 1 of the Auditor Oversight Act of 16 December 2005¹⁷¹ to carry out an audit under Article 24 of the FINMASA¹⁷²:¹⁷³

a.¹⁷⁴.

fund management companies for the investment funds they manage;

b.

SICAVs;

c.

LPCI;

d.

SICAFs;

e.¹⁷⁵

...

f.

representatives of foreign collective investment schemes.

² ...¹⁷⁶

³ The same audit company must audit the SICAV and any fund management company that it appoints pursuant to Article 51 Paragraph 5. FINMA may grant exemptions.¹⁷⁷

⁴ ...¹⁷⁸

⁵ The persons named in paragraph 1, managed investment funds and any real estate companies belonging to real estate funds or real estate investment companies must have their annual accounts and if applicable their consolidated accounts audited by a state supervised audit firm in accordance with the principles of the Code of Obligations¹⁷⁹ on the ordinary audit.¹⁸⁰

⁶ The Federal Council shall regulate the details. It may authorise FINMA to issue implementing provisions on matters of limited scope, and in particular on largely technical matters.¹⁸¹

¹ The valuation experts and real estate companies belonging to the collective investment scheme shall provide the audit company with full access to the accounting records, the accounting vouchers, the records and to the reports of the valuation experts; moreover, they shall supply them with all the information needed to perform the audit function.

² The audit company of the custodian bank and the audit company of the other licensees cooperate with each other.

¹ FINMA issues the necessary authorisations and approvals pursuant to this Act and supervises compliance with the statutory, contractual and regulatory provisions as well as the provisions of the articles of association.

² It does not review the expediency of the business decisions taken by the licensees.

³ L-QIFs are not subject to FINMA supervision.¹⁸⁶

¹ In the event of infringements of the contractual or regulatory provisions or of the provisions of the articles of association, the supervisory instruments pursuant to Articles 30-35 and 37 of the FINMASA¹⁸⁸ apply mutatis mutandis.¹⁸⁹

² Article 37 of FINMASA also applies mutatis mutandis to approval under the present Act.

³ If the investors' rights appear to be endangered, FINMA may order the licensees to provide the necessary collateral.

⁴ If an enforceable order issued by FINMA is not complied with after prior warning within the deadline that has been set, FINMA may itself carry out the required actions at the expense of the negligent party.

Licensees from which authorisation has been withdrawn or collective investment schemes from which approval has been withdrawn may be liquidated by FINMA. The Federal Council regulates the details.

¹ Where persons operate without any authorisation or approval, FINMA may order that the collective investment scheme be dissolved.

² To safeguard the interests of investors, FINMA may order that the collective investment scheme be changed to another legal status.

¹ In justified cases, FINMA may, in accordance with Article 64, appoint valuation experts to value the assets of real estate funds or real estate investment companies.

² It may dismiss the valuation experts appointed by the real estate fund or by the real estate investment company.

¹ Where there is justified concern that an authorised parties as defined in Article 13 paragraph 2 letters b-d is excessively indebted or has serious liquidity problems and there is no prospect of restructuring or restructuring has failed, FINMA shall withdraw authorisation from the financial institution, initiate bankruptcy proceedings and make this public.¹⁹²

² The provisions on composition proceedings (Art. 293-336 of the Federal Act of 11 April 1889¹⁹³ on Debt Enforcement and Bankruptcy, DEBA) and on notification of the court (Art. 716a para. 1 no. 8, 725a para. 3, 725b para. 3 and 728c para. 3 of the Code of Obligations¹⁹⁴) do not apply to the licensee referred to in paragraph 1.¹⁹⁵

³ FINMA appoints one or more bankruptcy liquidators. These are subject to supervi-sory control by FINMA and shall provide FINMA with a report if requested.¹⁹⁶

¹ The bankruptcy order has the effect of a commencement of bankruptcy proceedings pursuant to Articles 197-220 DEBA¹⁹⁸.

² The bankruptcy proceedings are conducted in accordance with Articles 221-270 DEBA. Articles 138a-138c remain subject to reservation.

³ FINMA may issue different rulings and orders.

¹ The bankruptcy liquidator may apply to FINMA for the following:

a.

to constitute a creditors' meeting and determine its powers as well as the necessary attendance and voting quorums necessary to pass resolutions;

b.

to designate a creditors' committee and determine its composition and powers.

² In the case of a SICAV with subfunds as defined in Article 94, a creditors' meeting or creditors' committee may be established for each subfund.

³ FINMA is under no obligation to follow the proposals of the bankruptcy liquidator.

¹ If all assets have been realised and all processes relating to the calculation of assets and liabilities have been completed, the bankruptcy liquidators shall draw up the final distribution list as well as the final accounts and forward these to FINMA for approval. Processes arising from the assignment of legal claims under Article 260 DEBA²⁰¹ shall be disregarded.²⁰²

² The approval decision, together with the distribution list and final accounts, shall be made available for inspection for 30 days. Notice of this availability for inspection shall be published in the Swiss Official Gazette of Commerce and on FINMA's website; advance notification shall be given to each of the creditors, stating their share, as well as to the owners if need be.²⁰³

³ FINMA issues the necessary orders for the closure of the proceedings. It announces the closure publicly.

Articles 37f and 37g of the Federal Act on Banks and Savings Banks of 8 November 1934²⁰⁵ apply to recognising foreign bankruptcy decrees and insolvency measures, as well as for coordination with foreign insolvency proceedings.

¹ In bankruptcy proceedings, creditors and owners of an authorised party covered by Article 137 paragraph 1 may appeal only against realisation actions and against approval of the distribution list and the final accounts. Appeals pursuant to Article 17 DEBA²⁰⁷ shall be excluded.

² The timeframe for filing an appeal against approval of the distribution list and the final accounts commences the day after they have been made available for inspection.

³ Appeals in bankruptcy proceedings have no suspensive effect. The instructing judge can restore the suspensive effect on request.

¹ Persons who perform a role in the context of this Act must provide FINMA with all the information and documents that it requires to carry out its duties.

² FINMA may order licensees to provide it with the information it requires to carry out its duties.²⁰⁹

¹ FINMA is authorised to collect data concerning licensees' business activities and the trend of collective investment schemes in order to maintain market transparency or to execute its supervisory function. It may appoint third parties to collect this information or order licensees to submit this data themselves.²¹⁵

² Third parties appointed to collect data must treat such data as confidential.

³ The statistical reporting duties vis-à-vis the Swiss National Bank, as specified in the Swiss National Bank Act of 3 October 2003²¹⁶, together with the right of FINMA and the Swiss National Bank to exchange data are reserved.

¹ Any person who breaches their duties is liable to the company, the individual investors and the company's creditors for the losses resulting therefrom, unless they prove that they are not at fault. Any person involved in the establishment, management, portfolio management, auditing or liquidation of any of the following financial institutions may be held liable:²¹⁷

a.

the fund management company;

b.

the SICAV;

c.

the LPCI;

d.

the SICAF;

e.

the custodian bank;

f.²¹⁸

the manager of collective assets;

g.

the representative of foreign collective investment schemes;

h.

the audit company;

i.

the liquidator.

² Liability as defined in paragraph 1 also applies to the valuation expert and the representative of the investors.²¹⁹

³ Any person who assigns the fulfilment of a task to a third party is liable for the losses caused by that third party unless they prove that they applied the degree of due diligence with regard to the selection, instruction and monitoring required in the given circumstances. The Federal Council may regulate the requirements for monitoring, subject to Article 68 paragraph 3 FinIA²²⁰.^{221 222}

⁴ The liability of the executive and governing bodies of the fund management company, SICAV and SICAF is based on the provisions of the Code of Obligations²²³ governing companies limited by shares.

⁵ The liability of an LPCI is based on the provisions of the Code of Obligations governing limited partnerships.

¹ If more than one person is liable to pay compensation, each of them is liable jointly and severally to the extent that the loss is attributable directly to them by reason of their fault and the circumstances.

² The claimant may file a claim for the overall loss against more than one party jointly, and may request that in the same proceedings the court determine each individual defendant's liability to pay compensation.

³ The court, taking all circumstances into consideration, determines recourse among the parties.

¹ The right to claim damages prescribes five years from the date on which the person suffering damage became aware of the damage and of the identity of the person liable for it, but not later than three years after the redemption of a unit and in any event not later than ten years after the date on which the harmful conduct took place or ceased.

² If the person liable has committed a criminal offence through his or her harmful conduct, then notwithstanding the foregoing paragraphs the right to damages or satisfaction prescribes at the earliest when the right to prosecute the offence becomes time-barred. If the right to prosecute is no longer liable to become time-barred because a first instance criminal judgment has been issued, the right to claim damages or satisfaction prescribes at the earliest three years after notice of the judgment is given.

¹ Any person who wilfully does any of the following is liable to a custodial sentence not exceeding three years or to a monetary penalty:²²⁶

a.²²⁷

...

b.

establishes a collective investment scheme without approval or authorisation;

c.²²⁸

...

d.²²⁹

offers domestic and foreign collective investment schemes that have not been approved to non-qualified investors;

e.

fails to maintain the books of account in an orderly manner or does not ar- chive company books of account, records and documents as prescribed;

f.²³⁰

in annual report or semi-annual report:

1.

provides false information or withholds material facts,

2.

does not provide all the mandatory information;

g.²³¹

with respect to the annual report or semi-annual report:

1.

fails to produce them or fails to produce them in an orderly manner,

2.

fails to publish it or fails to publish it by the specified deadline;

h.

provides false information to the audit company, the investigating officer, the administrative receiver, the liquidator or FINMA or refuses to provide the requested information;

i.²³²

...

j.

as valuation experts, commit a gross breach of the duties assigned to them;

k.²³³

...

l.²³⁴

...

^1bis ...²³⁵

² Where the offender acts through negligence, the penalty is a fine not exceeding CHF 250,000.

³ ...²³⁶

¹ Any person who wilfully does any of the following is liable to a fine not exceeding CHF 500,000:

a.

commits a breach of the provision concerning the protection against confusion or deception (Art. 12);

b.

provides non-permissible, false or misleading information in advertising material for a collective investment scheme;

c.²³⁷

...

d.

fails to file the required notification with FINMA, the Swiss National Bank or investors, or provides false information therein;

e.²³⁸

...

f.²³⁹

fails to keep the share register in terms of Article 46 paragraph 3 correctly;

g.²⁴⁰

commits a breach of the provision concerning the provision of information to investors and the designation of L-QIFs (Art. 118e);

h.²⁴¹

commits a breach of the reporting duty under Article 118f paragraph 1.

² ...²⁴²

³ ...²⁴³

⁴ ...²⁴⁴

¹ The Federal Council issues the implementing provisions.

² When issuing subordinate legislation, the Federal Council and FINMA shall observe the key requirements of the law of the European Communities.

The repeal and amendment of the existing legislation are set out in the Annex.

¹ This Act is subject to an optional referendum.

² The Federal Council determines its commencement date.

Commencement date: 1 January 2007²⁵⁴