The Swiss portfolio manager licence: requirements and supervision

The transition is over

Article 74 of the Financial Institutions Act gave firms that had not previously needed authorisation six months from entry into force to report to FINMA, and three years to meet the Act's requirements and file an application. The Act came into force on 1 January 2020, so those deadlines fell on 30 June 2020 and 31 December 2022. They are spent. FINMA retains a power under article 74(4) to extend the paragraph 1 and 2 deadlines in particular cases, but there is no general grandfathering left to rely on.

FINMA's own reporting gives the scale. In its 2025 annual report, published in April 2026, it records 1,921 applications received over six years, 1,664 licences granted by 31 December 2025, of which 97 institutions have since left supervision, 148 applications withdrawn, and 109 still under review, roughly half of those from the 2020 to 2022 transitional cohort. So the population is largely licensed; 148 applicants withdrew and 97 licensees have since left supervision, for reasons FINMA does not itemise beyond noting that some applications did not reach the authorisation standard or were rejected; and a small tail is still in process six years on. That reporting is FINMA's own account of its activity, no legal instrument, and it is the best available picture of the market.

Which licence: the line between individual and collective

Article 5(1) of the Act requires FINMA authorisation for the financial institutions listed in article 2(1), which are portfolio managers, trustees, managers of collective assets, fund management companies and securities firms. Article 5(2) adds a practical point that catches new entrants: the entity may not be entered in the commercial register before authorisation is granted.

A portfolio manager under article 17(1) is a person who, under a mandate and on a commercial basis, may dispose of clients' assets in the clients' name and for their account. A manager of collective assets under article 24(1) manages assets in the name and for the account of collective investment schemes or occupational pension institutions. The distinction turns on whose assets are being managed, whatever the size, and it decides both the capital requirement and who supervises you.

Article 24(2) then softens the line with a de minimis exemption, and this is the provision that most often needs ongoing monitoring. A manager of qualified-investor collective schemes stays within the portfolio manager category where the assets managed, including assets acquired through the use of leveraged financial instruments, total no more than CHF 100 million; or where they total no more than CHF 500 million, contain no leveraged financial instruments, and the schemes grant no redemption right for the first five years. For occupational pension assets the limit is CHF 100 million, with a further cap of 20 per cent of a single scheme's assets in the mandatory segment.

Two mechanics matter here. The calculation is at least quarterly for collective-scheme assets, leverage included, and quarterly for the CHF 100 million pension limit (article 34(1)(b) and (2)(b) of the Financial Institutions Ordinance); the 20 per cent test in the mandatory segment is the pension institution's own annual calculation, which it must communicate to the manager (article 34(2)(c)). And breaching a threshold starts a short clock under article 35 of the Ordinance, namely notification to FINMA within 10 days and an application within 90 days, although article 35(2) supplies the escape route: the application duty lapses where, within those 90 days, the business model is adjusted in a way that makes a renewed breach of the thresholds appear unlikely. A firm that grows through a good year without watching the quarterly figure can therefore find itself with three months to assemble an application for a different licence.

Article 24(3) lets a portfolio manager within the exemption apply for authorisation as a manager of collective assets, but only where the law of the state in which the scheme is established or offered, or the pension institution managed, requires management by a supervised manager (article 36 of the Ordinance); an expected growth path is no ground on its own, and a firm that expects to cross a threshold plans for the article 35 timetable instead.

What the portfolio manager licence requires

The financial requirements are in the Act, with the Ordinance supplying the mechanics. Article 22(1) requires minimum capital of CHF 100,000, paid up in cash and maintained permanently. Article 22(2) requires, in addition, adequate collateral or professional indemnity insurance. Article 23(2) requires own funds of at least one quarter of the fixed costs in the most recent annual accounts, capped at CHF 10 million. For a manager of collective assets the figures are higher: minimum capital of CHF 200,000, paid up and maintained at all times (Article 28 FinIA, Article 42(1) FinIO), and own funds of at least one quarter of the fixed costs in the latest annual accounts (Article 29 FinIA, Article 44(1) FinIO), together with either further capital of 0.01 per cent of the collective assets managed or professional liability insurance on FINMA's terms (Article 44(2) and (3) FinIO); the fixed-cost figure and any 0.01 per cent capital together are capped at CHF 20 million (Article 44(1)).

The Ordinance then fills in the mechanics. Article 28 defines fixed costs as personnel and operating expense, depreciation on fixed assets, and value adjustments, provisions and losses, with purely result-dependent personnel expense deducted, and allows FINMA to grant relief in justified cases. Article 27(5) permits FINMA to allow partnerships and sole proprietorships to deposit security on a blocked bank account corresponding to the minimum capital in place of holding capital.

One point deserves emphasis. Professional indemnity insurance does not replace the capital requirement, and it does not fully replace own funds either: under article 31(2) of the Ordinance, insurance may be credited against at most half of the own funds, and only to the extent it covers the risks of the business model. A firm relying on a policy to carry more than that is under-capitalised on the face of the Ordinance.

On management, article 20(1) requires the management body to consist of at least two qualified persons. Article 20(2) permits a single qualified person where it is demonstrated that the orderly continuation of the business is assured, which is the provision small firms rely on and the one supervisors probe. Article 25(1) of the Ordinance sets the qualification standard: five years of professional experience in third-party asset management plus training of at least 40 hours, with FINMA able to grant exceptions in justified cases, and with continuing education and succession arrangements required. There is relief for small firms elsewhere: under article 26(2) and (3) of the Ordinance, risk management and internal control need not be independent of revenue-generating activities where the firm has five or fewer full-time positions or annual gross revenue below CHF 2 million, measured over two of the three preceding financial years or set out in the business plan (article 26(3)), and a business model without elevated risks.

Supervision runs through a supervisory organisation

This is the structural feature that distinguishes the regime from every other Swiss licence. Under article 61(1) of the Act, portfolio managers and trustees are supervised by FINMA with the involvement of a supervisory organisation, and under article 61(2) the ongoing supervisory activity is carried out by supervisory organisations that FINMA has authorised. Affiliation is an authorisation condition under article 7(2), with the one exception article 61(1) reserves and FINMA's own page describes: a portfolio manager or trustee inside a domestic group can be supervised by FINMA alone within its consolidated supervision. FINMA licenses, approves material changes and takes a case over when the organisation reports a serious breach it cannot remedy in time (article 43b(2) of the Financial Market Supervision Act); the organisation runs the day-to-day. Managers of collective assets, fund management companies and securities firms are supervised by FINMA directly under article 61(3), and article 61(4) provides that if no supervisory organisation exists, FINMA takes over the supervision itself.

Four supervisory organisations are currently authorised, and FINMA maintains the definitive list on its website. Their number and identity have changed, most recently through a merger approved by FINMA in late 2025, so the list should be checked, never assumed, when an affiliation decision is being taken.

What the organisation does with what it finds is the practical point, and FINMA's own reporting gives the picture. In its 2025 annual report, FINMA records 35 reports from the supervisory organisations in 2025, of which 21 led to further enquiries or to intensive supervision by FINMA itself; in the remaining cases FINMA considered the organisation's own supervisory measures not yet exhausted and returned the matter to it. FINMA states that these case numbers rose continuously from 2023 to 2025, and that the increase falls in particular on the portfolio managers and trustees supervised indirectly through the organisations. FINMA's guidance of June 2026 counts the same year by source: 34 cases escalated by the organisations through reports, a further 34 opened on third-party information, 68 supervisory cases in all, against 34 in 2024 and 9 in 2023. The two counts are FINMA's own and are not reconciled by it; the point they share is the direction. The organisations escalate, and the numbers are rising. A firm whose relationship with its organisation is deteriorating should take advice when the questions start, before the matter escalates.

The conduct layer the licence brings with it

A portfolio manager is also a financial service provider under the Financial Services Act, and that Act supplies the client-facing obligations. Client segmentation sits in article 4, with the opting-out mechanism in article 5: a wealthy retail client, or a private investment structure created for one, may declare that it wishes to be treated as a professional client where it credibly declares either the knowledge necessary to understand the risks, from education and professional experience or comparable financial-sector experience, together with assets of at least CHF 500,000; or assets of at least CHF 2 million without the knowledge test. The Financial Services Ordinance defines in article 5 which assets count, and excludes directly held real estate, social insurance claims and occupational pension assets, which is the detail that decides borderline cases.

The conduct duties themselves run through the Act: information duties in article 8 and their timing in article 9, the suitability assessment in article 12, which is the test that binds portfolio management, the lighter appropriateness test being reserved for other services, the duty to warn in article 14, documentation in article 15, accountability in article 16, handling of orders in article 17, and best execution in article 18, implemented by article 21 of the Ordinance with written execution-venue criteria and at least an annual effectiveness review. Conflicts of interest, third-party compensation and employee transactions sit in articles 25 to 27.

Two adjacent obligations need attention, though the first reaches the unlicensed adviser and the foreign firm's staff and not the client advisers of a licensed portfolio manager, which is a supervised institution under article 3 of the Financial Market Supervision Act. Client advisers of Swiss providers that are not so supervised, and of foreign providers, must be entered in the register of advisers under article 28, subject to the carve-out in article 31 of the Financial Services Ordinance: advisers of foreign providers that are prudentially supervised abroad are exempt from registration to the extent they provide their services in Switzerland exclusively to professional or institutional clients. The professional indemnity cover is set by article 32(3) of the Ordinance at a minimum of CHF 500,000 a year, rising to CHF 1.5 million for two to four advisers, CHF 3 million for five to eight and CHF 10 million above eight.

Under article 77, a provider that does not deal exclusively with institutional or professional clients within the meaning of article 4(3) and (4) must affiliate to an ombudsman at the latest when it begins activity; a wealthy client who has opted out under article 5 is treated as professional but is not one under article 4(3), so serving opted-out clients keeps the duty alive. Where that duty exists, an adviser cannot be entered in the register without the affiliation (article 29(1)(c)); where it does not, registration turns on the other conditions.

Since 1 January 2025 there has also been a binding regulator instrument on top of the statute: FINMA Circular 2025/2 on rules of conduct under the Financial Services Act and its Ordinance. A circular states FINMA's supervisory practice and binds it in its own supervision, and it belongs in the compliance file alongside the statute.

What FINMA says it is looking at

On 3 June 2026 FINMA published guidance on the risks associated with the use of products in individual portfolio management, addressed principally to portfolio managers. FINMA states that its guidance is not a supervisory instrument and has no legal effect, so it is not law; it is, however, a clear statement of where its attention lies, and it emerged from escalated cases.

The themes are worth reading against your own mandates. FINMA points to the use of the firm's own products in client portfolios, to actively managed certificates, to foreign funds not subject to equivalent supervision, and to unregulated issuers, and it connects those to the suitability duty, to the conflict-of-interest and third-party compensation rules, to the risk management requirement in the Financial Institutions Ordinance, and to the outsourcing of risk management and compliance functions. The concern is less the instrument in isolation than whether the firm can show that a product benefiting the manager was suitable for the client and that someone independent enough looked at it.

1 October 2026, and the enforcement climate

The date is 1 October 2026. The revised Anti-Money Laundering Act and the new transparency legislation enter into force then, which we have covered separately. Portfolio managers and trustees are already financial intermediaries for anti-money-laundering purposes; the change for them is the arrival of the federal beneficial-ownership register and the extension of the perimeter to certain advisory activities. Two further amendments land the same day through the transparency act: a new article 61a of the Financial Institutions Act on the exchange of information between FINMA and supervisory organisations, and an amendment to article 88 of the Financial Services Act. A firm supervised through an organisation should understand that the channel between that organisation and FINMA is being formalised.

The second factor is the enforcement climate. FINMA's 2025 enforcement reporting records 463 investigations opened into potentially unauthorised firms and persons, 40 proceedings conducted against unauthorised actors of which 14 were concluded, affecting roughly CHF 94 million of client funds, 11 public cease-and-desist orders against individuals, and more than 300 warning-list entries, an all-time high. FINMA does not break those figures down by licence type, so the number relating specifically to unlicensed portfolio management cannot be stated. The direction is nonetheless unambiguous, and in our judgement the greater exposure lies with the adviser who concluded, somewhere around 2021, that the mandate structure meant the licence did not apply, ahead of the licensed firm with an imperfect file.

What this means for you

• Monitor the thresholds quarterly. Article 34 of the Ordinance requires a quarterly calculation including leveraged positions, with the pension institution supplying the annual 20 per cent figure, and a breach gives you 10 days to notify FINMA and 90 days to apply for a different licence, unless the business model is adjusted within those 90 days so that a renewed breach is unlikely.
• Do not treat insurance as capital. Minimum capital of CHF 100,000 must be paid in cash and maintained, and professional indemnity insurance may be credited against at most half of the own funds requirement.
• Test the single-manager position carefully. Two qualified managers are the rule; one is permitted only where orderly continuation is demonstrated, and that demonstration is what a supervisor will ask to see.
• Read the June 2026 guidance against your product list. Own products, actively managed certificates, foreign funds without equivalent supervision and outsourced control functions are where FINMA says its attention sits.
• Take advice when the supervisory organisation starts asking. On FINMA's own count, supervisory cases rose from 9 in 2023 to 68 in 2025, and a serious breach the organisation cannot remedy in time goes to FINMA; the time to act is before the report is made.
• Check the ombudsman and register position before onboarding. Where the provider must affiliate to an ombudsman, its registrable client advisers cannot be entered without it, and the insurance minimum scales with the number of advisers.

Isak Legal advises asset and wealth managers, trustees and their owners on Swiss authorisation, supervisory relationships and the conduct framework that sits behind a licence, working with a registered Swiss lawyer where Swiss law requires one. See our Financial Regulation page, or get in touch.

This client update is provided for general information only, reflects the position as at 27 September 2026 and does not constitute legal advice or create a lawyer-client relationship. Statutory references are to the Financial Institutions Act (SR 954.1) in the consolidated version with status 1 March 2024 and the Financial Institutions Ordinance (SR 954.11) with status 1 January 2025, and to the Financial Services Act (SR 950.1) with status 1 March 2024 and its Ordinance (SR 950.11) with status 1 January 2022; consolidated versions of the two Acts with status 1 October 2026 are already published and not yet in force. FINMA Circular 2025/2 is a binding statement of supervisory practice; FINMA guidance of 3 June 2026 is expressly non-binding; licensing and enforcement figures are taken from FINMA's own reporting and from no legal instrument, and the list of authorised supervisory organisations changes and should be checked on FINMA's register. Representation before Swiss courts and authorities, and any other matter that Swiss law reserves to lawyers entered in a cantonal register, is undertaken with a registered Swiss lawyer. For advice on a specific matter, please contact us.