SICAFs: investment companies with fixed capital

Investment companies with fixed capital must be authorised by FINMA as institutions. FINMA must also approve each SICAF's constituting documents (i.e. its articles of association and investment regulations).

A SICAF is a limited company as defined in the Swiss Code of Obligations. Its sole object is collective investment. It is not listed on a Swiss stock exchange and its shareholders are not necessarily qualified as required in Article 10 para. 3 CISA.

Authorisation and approval requirements

A SICAF must be authorised by FINMA as an institution (Art. 13 para. 2 let. d CISA) before it can begin operations. FINMA must also approve the SICAF’s constituting documents, namely its articles of association and investment regulations (Art. 15 para. 1 let. d CISA). The following specific authorisation and approval requirements for SICAFs are set out in Article 110 ff. CISA and Article 122 ff. CISO:

The ratio of equity capital to total assets must be appropriate.
The company’s name must contain a description of its legal form or the abbreviation "SICAF".
Shares must be fully paid up.
The issuing of voting shares, participation certificates, dividend right certificates and preference shares is prohibited.
The key provisions concerning investments, investment policy, investment restrictions and risk diversification, etc. must be set out in the articles of association and the investment regulations.
A custodian bank must be designated.
An audit firm must be appointed.
The company may only manage its own assets.
The main purpose of the company must be to generate returns and/or capital gains and not to engage in business activities as such.
It is prohibited from providing services to third parties in accordance with Arts. 26 and 34 FinIA.
The minimum deposit on foundation must be at least CHF 500,000 in shares, fully paid up.

Since the institution and the product are inextricably linked, the articles of association must contain provisions for both. Article 626 ff. SCO (Art. 112 CISA) regulates the content of the articles of association. In addition, a SICAF must define investment regulations specifying the investments, investment policy, investment restrictions, risk diversification and the risks associated with the investments (Art. 115 para. 1 CISA).

Exemptions from regulatory requirements

Some types of investment company are not subject to CISA. Under Article 2 para. 3 CISA, investment companies established as Swiss limited companies are not subject to the law provided that:

they are listed on a Swiss exchange or
only shareholders in accordance with Article 10 paras. 3 and 3ter are entitled to participate and
their shares are registered.

Changes in circumstances

If there is any alteration to the basis on which authorisation or approval was originally granted, permission must be obtained from FINMA before operations can be resumed (Art. 16 CISA).

The articles of association, investment regulations and organisational rules must be submitted to FINMA for authorisation/approval (Art. 14 paras. 1 and 2 in conjunction with Art. 7 para. a CISO). Any material changes to the articles of association or investment regulations which have been passed at the SICAF's annual general meeting and approved by FINMA must be published in an official publication (Art. 126 CISO).

Changes in accordance with Article 15 paras. 1 and 3 CISO must be reported to FINMA immediately. FINMA then confirms that the changes comply with the law.