Basel, 5 September 2008 – The cooperation efforts made between the financial centre, the authorities and the government over the last six months to improve conditions and increase the competitiveness of Switzerland’s financial centre are showing initial positive results. The Swiss Financial Centre Dialogue Steering Committee set up for this purpose in January approved the first package of measures on 2 September 2008. These measures provide clarity in the taxation of the hedge fund business and the private equity business and contribute to liberalising authorisation practices for investment funds. This should strengthen Switzerland’s medium-term position in terms of the international competition among financial centres.

At its meeting on 2 September 2008, the Swiss Financial Centre Dialogue Steering Committee approved various measures and a schedule of further work to promote the Swiss financial centre for the attention of the Strategy Committee (cf. box).

More competitive solution for hedge funds and private equity

To increase Switzerland’s appeal in terms of hedge funds and private equity, a circular from the Federal Tax Administration is to clarify the tax-related problems linked to the performance fee and carried interest. This will therefore provide the operators concerned with the legal certainty they require for tax planning. Due to the fact that the circular is based on current legislation, it will also be possible for the measure to be implemented rapidly. Switzerland will therefore be able to position itself with a competitive fiscal framework in a dynamic market environment. Furthermore, the procedure of voluntary subordination to supervision by the Swiss Federal Banking Commission (SFBC) for asset managers in Switzerland who manage offshore funds (in particular managers of single hedge funds), should be simplified.

Abolishing "Swiss finish" in investment funds

With a view to promoting the production of Swiss investment funds, the authorisation procedure should be rendered more efficient. To achieve this goal the SFBC intends to forego the so-called ‘Swiss finish’ for Swiss and foreign investment funds.

Improving the monitoring of international regulatory developments

A permanent joint monitoring group is to be responsible for the early recognition and analysis of international regulatory developments in the financial markets to enable the authorities and the sectors concerned to react quickly to developments in foreign regulatory frameworks. In addition a technical working group is to deal with establishing international standards to combat financial crime.

Further work schedule

The Swiss Financial Centre Dialogue Steering Committee has adopted an extensive work schedule. The core points of the Swiss Financial Centre Dialogue Steering Committee’s other work concerns mainly:

• additional improvements for Switzerland as a production centre for investment funds (e.g. selective introduction of the reporting procedure for collective capital investments, extending the target investor group for single-investor funds, recommendations for measures to strengthen real estate funds, various adjustments to unit trusts, recommendations for measures to increase the attractiveness of single manager hedge funds and funds of hedge funds).
• consolidation of various initiatives in the insurance sector. This includes the question of whether and how the Swiss and EU insurance markets can be brought even closer together. To that end, the corresponding EU legislation will be compared with Swiss law. The economic impact of such scenarios will also be analysed. With the mutual recognition of the supervisory frameworks the conditions can be created for pan-European insurance activities.
• detailed examination of the economic effects of increased competitiveness of the financial centre.

Information for the press:

Paul Siegenthalter, Director of the Federal Finance Administration (FFA) and Urs Ph. Roth, Chief Executive Officer and Delegate of the Board of Directors of the Swiss Bankers Association (SBA) will be available to take questions from the press on 5 September 2008 at 11.30 a.m. during a teleconference at tel. +41 52 267 07 07 (PIN Code 587264).

Information for journalists

The corresponding documentation and further information will be available on the following websites:
www.swissbanking.org; www.svv.ch; www.sfa.ch; www.sfms.com

Contacts