Swiss investor categories
Swiss investors are classified into three categories: Institutional Clients, Professional clients and Private clients.
Requirements vary according to the category.
Article 4 of FinSA states the obligation for financial service providers to classify their clients according to the categories above. Care must be exercised in correctly assessing the client category, as the possibility to opt-in or opt-out of the different categories exists in many cases. The same article 4 states that the obligation to classify clients is waived if a financial service provider treats all their clients as private clients (i.e., the higher level of protection).
- Financial intermediaries as defined in the Swiss Banking Act (BankA), the Collective Investment Schemes Act (CISA) and the Financial Institutions Act (FinIA), including banks, fund management companies, portfolio managers and trustees
- Swiss regulated insurance institutions
- Foreign insurance institutions and financial intermediaries that are subject to prudential supervision
- Central banks
- National and supra-national public entities with professional treasury management
Institutional clients may opt-in in writing to be considered professional clients (thus benefiting from a higher level of investor protection).
Distribution to Institutional clients is subject to simplified regulatory requirements.
- Public entities (non national or supra-national) with professional treasury management
- Pension funds, family offices and other companies with a professional treasury management
- Large companies satisfying at least two of the following criteria: (1) a balance sheet of at least CHF 20 million; (2) a turnover of at least CHF 40 million; (3) equity of at least 2 million
- HNWI who opt out of the private clients category
- Family offices without a professional treasury management who opt out of the private clients category
Professional clients (non-institutional) can opt-out in writing to be considered institutional clients (thus giving up a certain amount of investor protection).
They may also opt-in in writing to be considered private clients (thus benefiting from the same level of investor protection as private clients).
Distribution to Professional clients is subject to simplified regulatory requirements.
- Individuals and HNWI
- Family offices and other companies without a professional treasury management
- All non-professional clients
Distribution to Private clients is subject to a FINMA authorization and regulatory requirements.
Professional treasury management?
Art. 3 FinSO states that a company or a private investment structure has a professional treasury management if it employs internally (or mandates externally) an experienced person with qualifications in the financial domain to manage their financial resources in the long term.