Swiss regulator files 16 criminal complaints of unauthorised portfolio managers and trustees

The Swiss regulator [FINMA] has filed

• 16 criminal complaints against companies acting without a portfolio manager or trustee licence in 2023.

FINMAs latest update shows

• Forty there [43] complaints regarding suspicious activity were lodged with the Federal Department of Finance.
• Twenty-seven [27] were filed by the end of 2022, though the update does not specify when the first was made.
• Two hundred and thirty-four [234] institutions added to its warning list.
• Five [5] companies were told to restrict their activity as portfolio managers or trustees to actions strictly necessary for safekeeping assets when submitting their licence applications after the transitional period.

Licencing

• Portfolio managers and trustees were required to submit their licence applications to a supervisory organisation by the end of June 2022, except for a handful of companies granted extensions—the transitional period ended at the end of that year.

Expansion of trustee licensing

• Following a decision by the Federal Criminal Court, Finma has re-examined the legal status of trustees.
• The regulator now believes trustees do not only require a licence
• If they generate gross earnings over CHF 50,000 per calendar year from their activities or establish or
• Maintain business relationships with over 20 contractual partners per year that are not limited to once-only action.
• If they have unlimited power of disposal over trust assets exceeding CHF 5m at any given time.
• Trustees required to obtain a licence must apply by the end of 2024 and must affiliate with a supervisory organisation beforehand and tell Finma they need a licence by the end of June.

Status

• The financial regulator announced these repercussions in a broader update on the licensing process for Swiss portfolio managers and trustees.
• By December 31,
• 1,195 licences had been granted to 1,187 institutions, of which eight obtained a dual licence as both a portfolio manager and trustee.
• Of the 1,699 applications received by the end of 2022, 70% have been licensed.
• Of the 78 applications received since the start of 2023, 38 have received licences (48.7%).
• As a result of the above
• Most licensed companies have fewer than three full-time positions, while the total assets under management are around CHF 216bn.
• Around 50 companies that submitted their applications by the end of 2022 have not received any notification from Finma. They can keep working until the regulator has decided on their licence.
• Meanwhile, 63 (4%) companies that submitted applications by the end of 2022 withdrew their applications the following year.
• More than 60% of portfolio managers and trustees submitting their licence applications in 2022 did so in the second half, which concentrated costs for Finma.
• Consequently, there will be higher supervisor levies for the supervisory area from 2024 to 2026, although Finma still needs to publish the exact figures.

Source

https://citywire.com/americas/news/swiss-regulator-files-16-criminal-complaints-of-unauthorized-portfolio-managers-and-trustees/a2435567