FINMA authorisation for portfolio managers

Illustrative example; names are placeholders and the facts are invented. Company A GmbH manages portfolios for 12 clients with no family or business ties to it, with unlimited power of disposal over CHF 4 million of their assets, and earns CHF 60,000 a year from the work. Its earnings alone cross the first threshold, so the activity is commercial (FinIO Art. 19(1)(a)) and Company A is a portfolio manager that needs FINMA's authorisation (FinIA Arts. 5 and 17(1)). Among the requirements: a management of at least two qualified persons as a rule, and minimum capital of CHF 100,000 paid up in cash (FinIA Arts. 20 and 22). Once authorised, it is supervised on an ongoing basis by a supervisory organisation (FinIA Art. 61).

Earnings. Gross earnings from the activity of more than CHF 50,000 per calendar year. (FinIO Art. 19(1)(a))

Relationships. Business relationships, not limited to a one-off activity, with more than 20 contractual partners in a calendar year, or at least 20 such relationships maintained in a calendar year. (FinIO Art. 19(1)(b))

Assets. Unlimited power of disposal over assets belonging to others that exceed CHF 5 million at any given time. (FinIO Art. 19(1)(c))

Not counted. Activity for persons with family or business ties, for employee participation schemes and under legally regulated mandates, such as an executorship, is not factored into the assessment. (FinIO Arts. 6 and 19(2); FinIA Art. 2(2))

Authorisation first. Portfolio managers require FINMA's authorisation, and may be entered in the commercial register only after it has been granted. FINMA grants the licence; a supervisory organisation then carries out the ongoing supervision. (FinIA Arts. 5 and 61; FINMA)