In practice, the service is not used and serves little or no purpose of protection, as initially intended. For a market currently facing challenges around private banking, this is a blessing. The Swiss regulator (FINMA) could have been much more restrictive, as can be seen in many of its european union neighbours, such as Germany, France and Italy. When revising its Collective Investment Schemes Act (KAG), the Swiss legislator adopted a different approach from that of the European Union with AIFMD – the emphasis in Switzerland on distribution, distribution and regulation around this company. The resulting framework is pragmatic, easy to put in place, avoids regulatory reporting or the need to establish a local presence, not too painful, not protectionist and, despite a number of flaws, not illogical. The solution is to conclude the representation and paying agency agreements before the start of the investor call. If no assets are contracted by non-qualified Swiss investors, representation should not be maintained. However, the obligation to represent exists when a qualified investor not regulated in Switzerland is invested, even if there is no active marketing – and this, as long as the investor is in office, usually for the duration of the fund for private equity vehicles. However, since there is no existing business practice on which to rely when faced with cases that are not provided for by law, these representatives must take courageous decisions.
The lack of clarity affects a number of alternative investment funds, but solutions are usually found. A distinctive feature of the selection of a representative is clearly the experience and diversity of cases that have been dealt with so far. For investment managers who want to enter Switzerland, take the time to understand the legal framework, get to know the representative and try to get a good idea of their experience with complex problems.. . . .