Portfolio Managers and Trustees – FINMA Authorization – What needs to be done?

Portfolio Managers and Trustees – FINMA Authorization – What needs to be done?


This newsletter sets forth from a practical standpoint the steps you need to take as portfolio manager or trustee within the meaning of the FinIA.

1. Am I subject to the authorization requirement from FINMA?

Portfolio managers and trustees are under the obligation to obtain an authorization from FINMA. In our previous newsletter, we described the terms "portfolio manager" and "trustee" within the meaning of the FinIA:

  • In essence, a portfolio manager is deemed to be one who has power of attorney over the assets of its clients. The following are therefore considered to be portfolio management activities: (i) discretionary portfolio management, (ii) investment advice with transmission to the bank by the portfolio manager of the client's orders and finally (iii) receipt and transmission of client orders relating to financial instruments, without an advisory mandate, on the basis of a power of attorney given to the portfolio manager or "in the context of the fiduciary holding of the client's assets".
  • As for the definition of trustees, it covers the activity of administration of a trust within the meaning of the Hague Convention on the Law Applicable to Trusts and their Recognition.

It is important to note that portfolio managers and trustees that are authorised as a company belonging to a financial group supervised by FINMA ("Group Companies") will, for the purposes of on-going supervision, have to be affiliated to a SO. FINMA will, however, continue to exercise the group supervision. It should be noted that these Group Companies have until 31 December 2020 at the latest to obtain a SO-affiliation and submit their application for authorization to FINMA.

2. When do I have to submit my application for authorization to FINMA?

In accordance with the transitional provisions, portfolio managers and trustees that are already in business on 31 December 2019 must first notify FINMA by 30 June 2020 at the latest.

This notification must be made via the portal set up by FINMA, here.

Portfolio managers/trustees simply need to register and then fill in and submit the form entitled "Notification form pursuant to art. 74 FinIA".

Once the notification has been done, the portfolio manager/trustee has until 31 December 2022 to file its application for authorization with FINMA. However, before doing so, the portfolio manager/trustee must first obtain confirmation of its affiliation with an SO.

3. What do I need to do prior to filing my application with FINMA?

In order to be able to file an application for authorization with FINMA, the portfolio manager must not only comply with the FinIA, but must also be able to demonstrate that it complies with the Financial Services Act (FinSA). The deadline for implementing the rules of conduct and organizational requirements of the FinSA is 31 December 2021.

Trustees, if they do not provide financial services, must be able to demonstrate compliance with the FinIA.

The filing of the application for authorization can only be considered if the portfolio manager/trustee has answered positively the three following main questions:

o Are my capital and equity sufficient?

The minimum capital required by the FinIA is CHF 100,000. As far as equity is concerned, it must amount to ¼ of the fixed costs from the last annual accounts, up to a maximum of CHF 10 million.

Liability insurance is not compulsory but can be applied to cover half of the equity.

o Is my organization compliant?

As a general rule, a portfolio manager/trustee must have a board of directors, a management and a body responsible for compliance and risk management. The number of people required for each of these bodies will depend on three main factors: (i) the number of employees of the manager or trustee, (ii) its annual gross income, and (iii) the type and extent of the activity it carries out and the risks generated by this activity.

The following is a chart summarizing the main rules provided for by FinIA and FinIO with respect to the organization of portfolio managers and trustees:

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o Are my internal documentation and procedures compliant with the FinIA, respectively the FinSA?

The Guide Application for Authorization drawn up by FINMA lists all the documents that portfolio managers and trustees must attach to their application.

Thus, before submitting their application to FINMA, portfolio managers and trustees must ensure that their agreements and internal documentation comply with the FinIA (if applicable, also with the FinSA) and that they are able to produce all the documents required in the Guide Application for Authorization.

These documents will be reviewed by the SO and FINMA as part of the authorization process.

Based on the Guide Application for Authorization, the required internal documentation includes in particular:

  • Organizational by-laws
  • Compliance policy
  • Risk Management policy
  • MLA policy, etc.

In addition, for those subject to the FinSA, the following will need to be included in the file:

  • Code of conduct policy (FinSA)
  • Discretionary mandate and attachments
  • Advisory mandate and attachments, etc.

4. How must I submit my application to FINMA?

The portal set up by FINMA, which the portfolio manager/trustee used for the notification, must also be used to file the application for authorization with FINMA.

For this purpose, the portfolio manager/trustee must complete the application for authorization on the portal set up by FINMA, here, under the tab "Initial approval application".

The portfolio manager/trustee may grant access to its portal, and thus to its draft application for authorization, to both internal and external persons (e.g. lawyers). To do so, it must add them under the "Administration" tab.

Once its application for authorization completed, the portfolio manager/trustee must authorize the selected SO to access its portal in order to allow the SO to reach a decision on its file.

Once the SO-affiliation obtained, the right of access to the application for authorization may be granted to FINMA for examination via the FINMA portal.


Although the transitional provisions of the FinIA have given portfolio managers and trustees a relatively long period of time to comply with this new regulation, we recommend that those concerned start considering the three questions set out under point 3 of our newsletter in order to establish and plan the work that needs to be done prior to filing the application for authorization.

The authors of this newsletter are of course at your disposal to advise you in this process of reflection and to assist you in filing your application for authorization.