In the last few years, alternative investments, and hedge funds in particular, have become part of the standard asset allocation process in the Swiss private banking business as well as for many Swiss institutional investors, including insurance companies and pension funds.
THE SWISS MARKET
Legal and regulatory framework
The relevant Swiss legal and regulatory framework regarding hedge funds is the Collective Investment Schemes Act of 23 June 2006 (CISA) which entered into force on 1 January 2007. CISA is designed as a framework legislation governing the setup and management of Swiss collective investment schemes, as well as the regulation of entities active in the sector (e.g. fund management company, fund representations, fund distributors, and so on). CISA has been implemented by two ordinances issued by the Swiss Federal Council and the regulator responsible for the oversight of collective investment schemes, namely FINMA (formerly the Swiss Federal Banking Commission). FINMA has...