Switzerland’s Financial Market Supervisory Authority (FINMA) today provided an update on the status of licences issued to portfolio managers and trustees.

Since the beginning of 2020, portfolio managers and trustees operating on a commercial basis have needed a licence. When the Financial Institutions Act (FinIA) came into force, most institutions subject to the new licensing requirement benefited from a transitional period. FINMA has now finished processing the majority of the 1,699 applications received before the end of the transitional period.

FinIA granted a transitional period of three years for existing institutions. Of the 1,699 applications received by the end of 2022, FINMA finished processing more than 94% by the end of February 2025.

Despite FINMA’s recommendation to commence the licensing process in good time, FINMA received more than half of the applications in the last four months of the three-year transitional period.

The applications submitted later were of rather poor quality, which delayed their approval by FINMA. In more than 40% of the cases FINMA asked at least five times from the institutions for further amendments of the application. Of those 94 applications from the transitional period which are still pending, around half are the subject of investigations, e.g. because members of corporate bodies or the institutions themselves are respectively were involved in criminal proceedings.

As at 28 February 2025, FINMA had approved a total of 1,532 of the 1,864 applications submitted since the introduction of the licensing requirement. Specifically, 1,428 out of 1,699 institutions that submitted their application by the end of 2022 received a licence and 104 out of 165 institutions that submitted their application from the beginning of 2023. Around 8% of all applications submitted (131) were withdrawn by the institutions.

The licensed institutions have already reported a number of changes that required FINMA’s prior approval. A total of 3,221 change requests were received. In the future, FINMA expects to receive around 1,700 change requests per year.

The two-tier supervisory model provides for ongoing supervision (including auditing) of portfolio managers and trustees to be carried out in general by supervisory organisations (SOs) which themselves are authorised and supervised by FINMA.

If there are indications of irregularities at institutions that the SO cannot remedy itself, it escalates the case to FINMA, which in turn restores compliance with the law at the licensed institution by taking further supervisory measures. The number of cases escalated by the SOs to FINMA for preliminary investigation and the number of institutions under FINMA’s intensive supervision increased significantly in the second half of 2024.