SWITZERLAND Law and Practice Contributed by: Nicolas Béguin, Joseph Merhai, Thomas Pasquier and Benjamin Vignieu, Aegis
In terms of pecuniary rights, the SICAV entitles shareholders to a share of the profits (Article 78, para 1, lit b CISA) and to a proportional share of the liquidation proceeds (Article 97, para 2 CISA). Shareholders also have the right to demand the repurchase of their shares and their redemption in cash at any time (Article 78, para 2 CISA). The redemption price is set on the basis of the net asset value per unit on the valuation date, plus or minus any commissions and costs (Article 80 CISA). Limitations on the right to redeem are also possible, as is the case with contractual invest - ment funds. Other funds for alternative investments This is a category of open-ended CIS (which can be structured either as a contractual investment fund or as a SICAV), whose investments, struc - ture, investment techniques (short-selling, bor - rowing of funds, etc) and investment restrictions entail a risk profile that is typical for alternative investments (Article 71, para 1 CISA). Leverage is permitted only up to a certain per - centage of the fund’s net assets (Article 71, para 2 CISA). Other funds for alternative investments may: • raise loans for an amount equal to a maxi - mum of 50% of the net assets (Article 100, para 1, lit a CISO); • pledge or cede as collateral no more than 100% of the fund’s net assets (Article 100, para 1, lit b CISO); • commit to an overall exposure of up to 600% of the fund’s net assets (Article 100, para 1, lit c CISO); and • engage in short-selling (Article 100, para 1, lit d CISO). Reference must be made in the fund name and in fund documentation and advertising material
to the special risks involved in alternative invest - ments (Article 71, para 3 CISA). Finally, FINMA may allow such funds investing directly to use a prime brokers instead of a Swiss custodian bank for settlement services (Article 71, para 5 CISA). Closed-Ended Funds Closed-ended CIS take the form of either a Swiss limited partnership for collective invest - ments (LPCI) or an investment company with fixed capital (SICAF) (Article 9, para 1 CISA). Swiss limited partnership The LPCI is the Swiss equivalent of the limited partnership under Anglo-Saxon law (CISA Mes - sage, FF 2005 6019 f), and was designed primar - ily as a private equity investment vehicle (Article 103, para 1 CISA). However, the LPCI may be used to make other investments (Article 103, para 2 CISA), including alternative investments, real estate, and construction and infrastruc - ture projects (Article 121 CISA). It is therefore a potentially adequate structure for a Swiss AIF. The LPCI is established on the basis of the lim - ited partnership referred to in Article 594 et seq of the CO and is supplemented by the special provisions of CISA (Article 99 CISA). It is a part - nership without legal personality, which may nevertheless, under its corporate name, acquire rights and commit itself, sue and be sued (Arti - cle 99 CISA cum Article 602 CO), which gives it quasi-personality. The LPCI must secure dou - ble prior authorisation from FINMA, both as a subject (Article 13, para 2, lit c CISA) and as a product (Article 15, para 1, lit c CISA). As an LPCI is a closed-ended CIS, investors have no direct or indirect right to the redemption of their units at the net asset value charged to the
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