The new legal provisions on the limited qualified investor fund (L-QIF) were adopted unanimously (with one abstention) by the Swiss Council of States on 9 June 2021. The introduction of the L-QIF is intended to strengthen the competitiveness of Switzerland as a location for funds and asset management.
The L-QIF is mainly a figure of deregulation adequate to the investor profile. Under the new provisions, certain collective investment schemes will be exempted from the obligation to obtain approval from the Swiss Financial Market Supervisory Authority (FINMA). The condition is that they are open exclusively to qualified investors as defined by the Collective Investment Schemes Act (CISA), mainly covering institutional and professional investors as well as asset management clients of regulated financial institutions. Furthermore, L-QIFs must be managed by institutions that are supervised by FINMA.
The set-up of an L-QIF is cheaper and faster while guaranteeing the usual levels of quality and security. With L-QIFs, qualified investors with links to Switzerland now have an alternative to similar foreign products like the Reserved Alternative Investment Fund (RAIF) in Luxembourg. The introduction of L-QIFs is therefore intended to enhance flexibility and to ensure that more collective investment schemes are launched in Switzerland in the future.
In contrast to the RAIF, the L-QIF has no free passporting to other EU jurisdictions and is expected to be mainly positioned as a purely Swiss construct. The draft is currently expected to enter into force at the beginning of 2023.
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