ZURICH, Dec 3 (Reuters) - Swiss-based firms can continue selling alternative investment products - such as in hedge funds or private equity firms - in the European Union after new rules come into force next year.
EU and Swiss regulators reached an agreement on Monday on alternative investments, which compete with traditional funds that invest in bonds, cash and stocks.
From July, the Alternative Investment Fund Managers Directive (AIFMD) will bar funds from non-EU countries, such as Switzerland, distributing or managing alternative investment funds unless their national regulator has the necessary co-operation arrangements with EU securities supervisors.
“The agreement between (Swiss regulator) FINMA and EU supervisors will further improve cross-border supervision of the funds business and ultimately reinforce investor protection in cross-border operations of alternative funds,” FINMA chairman Anne Heritier Lachat said.
Matthaeus Den Otter, chief executive of the Swiss Funds Association, an industry body, said: “This is a milestone on the road to market access for Swiss-based asset managers”.
Alternative assets account for several hundred billions of dollars in Switzerland’s $4.2 trillion asset management industry.
The global push for greater regulation of alternative investments has intensified since the financial crisis when a large number of these funds hit trouble and restricted or prevented investors from pulling their money out.
Switzerland’s alternative asset managers had feared AIFMD would cut off their access to the EU. Some considered shifting to Liechtenstein whose European Economic Area membership allows it to sell financial products into the EU more easily.
“The exchange agreements are a good signal for managers in Switzerland who want to be sure they can continue to operate in Europe after the advent of AIFMD and the revision to Swiss law,” said Glen Millar, head of the Geneva office of asset management consultancy Kinetic Partners. (Reporting by Martin de Sa‘Pinto; Editing by Dan Lalor)