From investment trusts to the Collective Investment Schemes Act

The first Swiss funds in the 1930s

The idea of pooling the savings of many small investors under professional management came to Switzerland from Britain and the United States. The Scottish and English investment trusts of the nineteenth century and the American mutual funds of the 1920s provided the models. Swiss holding and finance companies, discussed in Part C of this book, had already accustomed wealthy investors to indirect participation in foreign enterprises. The management of foreign-owned wealth was by then a substantial business: according to the Historisches Lexikon der Schweiz, the assets managed from Switzerland in 1930 amounted to about three times the country’s gross domestic product.¹ The Swiss literature on fund regulation places the origin of the Swiss investment fund in the 1930s, when banks began to offer vehicles inspired by Anglo-Saxon models so that small savers could have their money professionally managed.²

Zurich stood at the centre of this development. According to the corporate history of UBS, the Union Bank of Switzerland founded INTRAG in Zurich in 1938 to manage the bank’s investment trusts. INTRAG launched the America-Canada Trust Fund, known as AMCA, which UBS describes as the first Swiss investment fund with variable capital. After 1945 AMCA became the largest European investment trust for North American equities. In the same year the Swiss Bank Corporation co-founded the first Swiss real estate fund, Swissimmobil Series D.³ Other accounts date the first fund of the Union Bank of Switzerland to 1943, in the middle of the war.⁴ The discrepancy is of limited importance for the present purpose. What matters is that the investment fund entered Swiss finance through the big banks of Zurich and Basel, and that its early form looked across the Atlantic.

The choice of North America was not accidental. In the years before and during the Second World War, Swiss investors sought protection against the risk of a European war and against the currency controls that neighbouring states had imposed. A fund holding American and Canadian equities, administered from Zurich, offered diversification away from a continent that was drifting towards war. After the war the same vehicles allowed Swiss savers to take part in the long American boom. The pattern set in 1938 has proved durable: Swiss investors have always held a large share of their portfolios abroad, and Zurich managers have built their reputation on international diversification from a small domestic base.

Real estate funds and the Investment Funds Act of 1966

The two decades after 1945 brought a rapid expansion of funds, especially of real estate funds that financed the construction of apartment buildings during the post-war housing boom. The cantonal banks launched a first joint real estate fund in 1959, as their successor organisation Swisscanto records.⁵ Until the mid-1960s these vehicles operated without a specific statute.⁶ Several fund failures and the growing volumes invested by small savers created political pressure for regulation.

The Federal Act on Investment Funds of 1 July 1966 created the first statutory basis for funds in Switzerland. It entered into force on 1 February 1967, together with an implementing ordinance of 20 January 1967, and was later complemented by a further ordinance of 1971.⁷ The Act chose the contractual model that the banks had used. A fund was a pool of assets held for the investors under a collective investment contract with a fund management company, while a custodian bank safeguarded the assets and supervised the management company. Supervision was entrusted to the Federal Banking Commission, which thereby gained a second field of responsibility beside the banks. The legislative materials describe investor protection as the central purpose of the Act, an aim that has remained constant through all later revisions.⁸

The contractual form of 1966 still shapes Swiss practice. When a Zurich asset manager speaks of a Swiss fund today, it usually means a contractual fund administered by a fund management company, with a bank as custodian. The SICAV, the corporate form that dominates in Luxembourg, arrived in Switzerland only in 2007 and has remained less common. The practitioner literature confirms that the contractual investment fund remains the most common Swiss structure.⁹ The persistence of the contractual model reflects the path dependence of fund law. Once banks had built their fund management companies, custodian departments and distribution channels around a legal form, they had little reason to change it.

The revision of 1994

By the early 1990s the Act of 1966 had become outdated. The European Community had adopted its directive on undertakings for collective investment in transferable securities (UCITS) in 1985, which created a single market for retail funds among member states. After the rejection of the European Economic Area by Swiss voters on 6 December 1992, Swiss funds had no prospect of access to that single market. The legislator nevertheless sought to bring Swiss law close to European standards so that Swiss funds could compete in quality and so that foreign funds could be admitted in Switzerland on comparable terms.¹⁰ The revised Investment Funds Act of 18 March 1994 replaced the original Act. It introduced clearer fund categories, including securities funds that corresponded broadly to the European UCITS type, rules on the distribution of foreign funds and more detailed conduct obligations. Nieto describes it as the second stage in the development of Swiss fund distribution law.¹¹

The Act of 1994 left one important question open. Its scope was limited to contractual funds, and it was uncertain whether investment companies organised as corporations fell under it. The question increasingly reached the Federal Supreme Court. Meanwhile, listed investment companies such as the private equity and biotechnology holdings of the 1990s operated outside fund law and were subject only to stock exchange rules.¹² The gap became more visible as hedge funds, private equity funds and other alternative strategies spread in the late 1990s. Many Swiss managers set up their products in Luxembourg, Ireland, the Cayman Islands or the Channel Islands, because Swiss law offered neither a suitable corporate vehicle nor a limited partnership for closed-ended strategies.

The Collective Investment Schemes Act of 2006

The Federal Act on Collective Investment Schemes of 23 June 2006, known in German as the Kollektivanlagengesetz (KAG) and published in the classified compilation as SR 951.31, entered into force on 1 January 2007. It replaced the term “investment fund” with the broader concept of “collective investment scheme” and extended regulation to all forms of collective investment, whatever their legal structure.¹³ Beside the contractual fund, the Act introduced the investment company with variable capital (SICAV), the investment company with fixed capital (SICAF) and the limited partnership for collective investment (Kommanditgesellschaft für kollektive Kapitalanlagen, KmGK). The last of these was designed for private equity and venture capital and followed the Anglo-American model of a limited partnership with a corporate general partner.

The new vehicles did not bring the hoped-for repatriation of funds. Practitioner literature describes the SICAF as a vehicle that is theoretically available and unused in practice, while the limited partnership has seen only limited use.¹⁴ The main obstacles lay outside fund law. Swiss funds could not be marketed in the European Union on the basis of the UCITS or later the AIFMD passport, and the 35 per cent withholding tax on Swiss fund income made Swiss vehicles unattractive for foreign investors. Both points are discussed later in this chapter.

The Act has been amended several times since 2007. The revision of 2013, which followed the European directive on alternative investment fund managers, extended the scope of supervision to managers of smaller collective investment schemes and to representatives and distributors of foreign funds. It also tightened the concept of distribution.¹⁵ The larger reform came with the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA), both of which entered into force on 1 January 2020. FinSA took over the rules on the offering of financial instruments, including fund units, while FinIA took over the licensing of fund management companies and managers of collective assets. The KAG thereby became a law on products, with the rules on institutions and conduct moving to the new acts. Nieto counts this as the fifth stage in the development of Swiss fund distribution law.¹⁶ The last major addition before September 2026 was the Limited Qualified Investor Fund of 2024, to which a separate section is devoted below.

Notes

1. Historisches Lexikon der Schweiz (HLS), Sébastien Guex, “Finanzplatz”, on the integration of the local centres of Zurich, Basel and Geneva into a Swiss financial centre before the First World War, the size of assets managed from Switzerland, which already amounted to about three times gross domestic product in 1930, and the accumulation of capital in pension funds and investment funds after the deregulation of the 1980s, https://hls-dhs-dss.ch/de/articles/045549/. ↩
2. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), introduction and historical overview, on the emergence of Swiss investment funds in the 1930s on the Anglo-Saxon model and the successive stages of Swiss fund law from 1966 to the Financial Services Act, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩
3. UBS, “1935–1944”, corporate history, on the founding of INTRAG in Zurich by the Union Bank of Switzerland in 1938 to manage the bank’s investment trusts, the launch of the America-Canada Trust Fund (AMCA) as the first Swiss investment fund with variable capital, its position after 1945 as the largest European investment trust for North American equities, and the co-founding by the Swiss Bank Corporation of the first Swiss real estate fund, Swissimmobil Series D, https://www.ubs.com/global/de/our-firm/our-history/ubs-in-the-world/1935-1944.html. ↩
4. Wikipedia (German), “Anlagefonds”, stating that the Schweizerische Bankgesellschaft launched the first Swiss fund in 1943, https://de.wikipedia.org/wiki/Anlagefonds. The difference probably reflects the distinction between the founding of the management company and the launch of individual fund series. The corporate history of UBS is the more authoritative source. ↩
5. Swisscanto, “Swisscanto Erfolgsgeschichte: Zukunft auf Erfahrung bauen”, on the first real estate fund launched jointly by the cantonal banks in 1959, https://www.swisscanto.com/ch/de/ueber-uns/geschichte.html. ↩
6. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), historical overview, stating that the Federal Act on Investment Funds of 1 July 1966 created a statutory basis for funds in Switzerland for the first time, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩
7. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), on the Federal Act on Investment Funds of 1 July 1966, in force from 1 February 1967, the ordinances of 20 January 1967 and 13 January 1971, the revised Act of 18 March 1994 and the Collective Investment Schemes Act of 23 June 2006, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩
8. Thomas Jutzi and Damian Sieradzki, Geltungsbereich des Kollektivanlagenrechts (EIZ Publishing, 2022), on investor protection as the driving motive of Swiss fund legislation since the Investment Funds Act, the principle “same business, same risks, same rules”, the uncertainty under the Act of 1994 about corporately organised vehicles and the extension of the scope in the revision of 2013, https://eizpublishing.ch/wp-content/uploads/2022/01/Geltungsbereich-des-Kollektivanlagenrechts-Digital-V1_02-20220121.pdf. ↩
9. Dominik Oberholzer (Kellerhals Carrard), “Switzerland: An Investment Funds Overview”, Chambers and Partners, on the contractual investment fund as the most common Swiss structure, the SICAV, the limited partnership for collective investment and the SICAF, the fund categories, the requirement of a Swiss custodian bank and the liberal regime for distribution to qualified investors, https://chambers.com/content/item/6915. ↩
10. Council Directive 85/611/EEC of 20 December 1985 on undertakings for collective investment in transferable securities (UCITS), OJ L 375 of 31 December 1985, https://eur-lex.europa.eu/eli/dir/1985/611/oj. Swissvotes, “Bundesbeschluss über den Europäischen Wirtschaftsraum (EWR)”, vote of 6 December 1992 (rejected), https://swissvotes.ch/vote/388.00. Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), lists the alignment with European regulation (“Anlehnung an die europäische Regulierung”) as a characteristic of the revised Investment Funds Act of 1994, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩
11. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), on the revised Investment Funds Act of 18 March 1994 as the second stage of Swiss fund law, with provisions on international distribution and clarified conduct obligations, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩
12. Thomas Jutzi and Damian Sieradzki, Geltungsbereich des Kollektivanlagenrechts (EIZ Publishing, 2022), on the growing number of court decisions concerning the application of the Investment Funds Act to corporately organised collective investments, https://eizpublishing.ch/wp-content/uploads/2022/01/Geltungsbereich-des-Kollektivanlagenrechts-Digital-V1_02-20220121.pdf. ↩
13. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), on the Collective Investment Schemes Act of 23 June 2006, in force from 1 January 2007, and the change of terminology from “Anlagefonds” to “kollektive Kapitalanlagen”, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. The extension to all forms of collective investment is analysed in Jutzi and Sieradzki, Geltungsbereich des Kollektivanlagenrechts (EIZ Publishing, 2022). ↩
14. Dominik Oberholzer (Kellerhals Carrard), “Switzerland: An Investment Funds Overview”, Chambers and Partners, on the limited practical use of the Swiss limited partnership for collective investment and the observation that the SICAF is theoretically possible but not used in practice, https://chambers.com/content/item/6915. ↩
15. Thomas Jutzi and Damian Sieradzki, Geltungsbereich des Kollektivanlagenrechts (EIZ Publishing, 2022), on the revision of 2013 and the extension of the scope to distributors and representatives of foreign collective investment schemes, https://eizpublishing.ch/wp-content/uploads/2022/01/Geltungsbereich-des-Kollektivanlagenrechts-Digital-V1_02-20220121.pdf. ↩
16. Mercedes Nieto, Regulatorische Aspekte fondsbezogener Vertriebstätigkeiten in der Schweiz (EIZ Publishing, 2023), on the Financial Services Act and the Financial Institutions Act of 2018, in force since 2020, as the fifth stage of Swiss fund distribution law, https://eizpublishing.ch/wp-content/uploads/2023/09/Regulatorische-Aspekte-fondsbezogener-Vertriebstaetigkeiten-in-der-Schweiz-Digital-V1_01-20230927.pdf. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.