New Model Annex 'Information For Investors In Switzerland' For Prospectuses Of Foreign Collective Investment Schemes – Action Required

Author:Ms Bettina Rudin, Joana M. Meier-Pinheiro and Romaine Robbiani
Profession:Suter Howald Attorneys at Law
 
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  1. Background

    The prospectuses of foreign collective investment schemes (CIS) must provide for specific information for investors in Switzerland such as representative and paying agent in Switzerland. According to the Guidelines on Duties regarding the Charging and Use of Fees and Costs (Transparency Guidelines), which the Swiss Funds and Asset Management Association (SFAMA) issued on 22 May 2014, addi-tional information regarding the payment of retrocessions and rebates must now be pro-vided to investors in Switzerland.

    Therefore, the SFAMA issued a revised model annex "Information for investors in Switzerland" dated 5 March 2015 on 17 March 2015, as acknowledged by the FINMA (hereafter "Model Annex").

  2. What is new?

    2.1 Disclosure about retrocessions

    Retrocessions are payments made by the CIS, the fund management company or the management company (as the case may be) and their agents as remuneration for distribution activities in respect of fund units in Switzerland. The Model Annex clarifies that retrocessions are not considered as rebates even if they are ultimately passed on to the investors.

    The Model Annex provides for three alternative wordings in terms of retrocessions one of which has to be used as applicable in the individual case:

    retrocessions may be paid in the context of distribution in Switzerland. If retrocessions are paid, the particular distribution services (such as e.g. organization of road shows, attending fairs or events, etc.) for which retrocessions are paid have to be specified without naming the service providers. No retrocessions are paid. If the law of the country of domicile of the CIS or the fund management company (as the case may be) provides for stricter rules than Swiss law in respect to the payment of retrocessions in a country other than the country of domicile, these stricter rules also apply to the distribution in Switzerland and they have to be described accordingly. 2.2 Disclosure about rebates

    Rebates are direct payments made by the CIS or the fund management company or the management company (as the case may be) and their agents to investors upon their request, in order to reduce the fees or costs incurred by the investor in question. They are permitted provided that

    they are paid from fees received by the CIS, the Fund Management Company or the Management Company (as the case may be) and therefore do not represent an additional charge to the fund's assets; they are granted on the basis of...

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