Recent headlines about Switzerland have highlighted the slow death of banking secrecy, but its asset management industry is in just as much flux.
Strong third pillar
Martin Thommen, the SFA president told delegates at its recent Bern conference: “Planned revisions are about a lot more than just product revision or adaptation to European developments. They are about the future of Switzerland as a financial centre.
“We are convinced Switzerland, as a financial centre, needs a strong third pillar, next to investment banking and private banking.
“If we regulate too narrowly or in too exaggerated a fashion, then we could endanger the bough that we want to build out in Switzerland. We must build in the flexibility for a flourishing asset management industry. We also want investor protection and good regulation, and to promote the reputation of the Swiss financial centre.”
At present, fewer than 500 funds are believed to be regulated, although many thousands enlist for auto-regulation under a Code of Ethics and Professional Conduct.
But Daniel Roth, head of legal services and the General Secretariat at the Federal Department of Finance, told the SFA conference some revision of the fund laws would have been necessary, even if the AIFMD had not appeared.
“The financial market has changed since the financial crisis and there is a new understanding of investor protection. From our perspective, gaps in regulation have appeared.”
He emphasised the authorities would have a different perspective to the industry’s, to include market dealings and investor protection “where international standards will be ever higher”, as well as the standing of Switzerland as a financial centre and competitiveness.
Matthaeus den Otter (pictured), the SFA’s chief executive, said there was “uncertainty [in the industry] about what is coming to us”, and some disappointment at disagreements between the industry, regulators and politicians.
He likened it to private fire brigades in the past in America, which would attend a building in flames, then fight in front of it about who would extinguish it, while it was engulfed.