ONE Funds AG helps you with the realisation of your investment fund plans from day ONE. We find out your challenges and requirements. We determine the best way to reach your goals. We discuss and plan the setup and future administration of your investment fund idea(s). The below serves as reference for usual tasks that are performed during such setups.
– Drafting of the legally required constitutive fund documents and all agreements directly associated with it (subscription form, depositary agreement, portfolio management agreement, and/or advisory agreement)
– First contact with the certified auditor of the planned fund and potentially, where necessary, insertion of comments in the constitutive fund documents
– Preparation of all documentation required for delegation of the portfolio management function and appropriate coordination with the certified auditor and, where necessary, the Liechtenstein FMA
– Negotiations with external parties (e.g., depositary) regarding offers, etc.
– Verification that the fund name can be entered in the Liechtenstein commercial register and reservation of / application for the fund name
– Submission of the constitutive fund documents and information on the planned portfolio manager to the certified auditor and the responsible supervisory authority; where necessary, further modifications of the constitutive fund documents
– Reservation and subsequent activation of an ISIN as well as a Swiss and, where necessary, German securities ID number for the fund
– Registration of the fund with the local administrative authorities, where required by law (tax authority, commercial register)
– Deposit of the constitutive fund documents with the tax office and Commercial Register, where required by law
– Opening of a bank and securities account for the fund with the depositary
– Publication of the constitutive fund documents on the website of the Liechtenstein Investment Fund Association (www.lafv.li), which serves as the official publication medium
– Publication of prices via the official publication medium and/or via SIX SIS Switzerland
– Drafting of the investment company’s constitutive fund documents, including its articles of association
– First contact with the certified auditor concerning the foundation of the investment company
– Preparation of all documentation required for the application for approval of the investment company by the Liechtenstein FMA
– Registration of the investment company with the tax office
– Preparation of all documentation required for the application for entry of the investment company in the Liechtenstein commercial register
– Assumption of the executive management function for the investment company by means of an appointment agreement to be concluded
– Ongoing contacts with the authorities (FMA, commercial register, certified auditor, tax office, etc.)
– Representation of the investment company in all external dealings
– Performance of day-to-day tasks arising at the investment company level
– Administration of the investment company’s book-keeping
The statutory framework for AIFs generally covers any fund that is unable and/or not intended to comply at all times with the provisions of the UCITS Act. It should, in any event, be noted that the AIFMA does not regulate the product so much as the managers of that product. Its underlying aim was the internationally held political view that tighter regulation of the actual managers would indirectly enhance the quality of the managed AIFs.
As a result, a licensed manager under the AIFMA usually has a significant degree of freedom regarding the composition of the actual product. AIFs may hold all kinds of assets and may engage in borrowing and lending under given legal restrictions related thereto. Moreover, under the AIFMA, it is possible – in consultation with the appointed depositary – to appoint sub-depositaries and outsource the actual securities trading to qualified brokers (known as prime brokers).
This large degree of freedom concerning the composition of the actual product goes hand in hand with certain restrictions on the permitted investors. AIFs are normally intended for professional investors as defined in the MiFiD Directive, subject to supplementary regulations at national level. The definition of the typical AIF investor is defined by MiFiD.
There is no legal minimum investment into an AIF for any individual investors. However, for economic reasons the overall volume of an AIF should in all cases be in excess of CHF 10 million even if the legal minimum volume of EUR 1.25 million (or foreign currency equivalent) is significantly lower.
(legal basis: AIFM-Act, AIFM-Ordinance)
These are securities funds that adhere to the provisions of the UCITS Directive in their investments. Within a year of receiving approval, they must have minimum assets of EUR 1.25 million or the equivalent sum in Swiss francs (Art. 9 para. 4 UCITSA, Art. 13 para. 2 UCITSO). A key characteristic of funds configured as UCITS is that, once approved in Liechtenstein and subject to prior notification of the FMA, they can be offered for sale throughout the entire EEA (single licence and European passport; Art. 97 et seq. UCITSA, Art. 107 et seq. UCITSO). They also allow the creation of what are known as “master-feeder structures” (Art. 60 et seq. UCITSA, Art. 71 et seq. UCITSO). Cross-border mergers of funds are possible (Art. 38 et seq. UCITSA, Art. 62 et seq. UCITSO).
The level of diversification prescribed by the investment regulations need not be achieved until six months after the fund’s launch, although the principle of diversification must still be applied at all times (Art. 59 para. 3 UCITSA, Art. 4 in conjunction with Art. 69-70 UCITSO). The fund must be valued at least twice a month, and the valuation must be in line with customary market practices and international standards (Art. 78 para. 1 UCITSA, Art. 5 UCITSO).
With a view to strengthening investor protection, for all fund categories, the information and characteristics of the fund that are essential to the investor are clearly and generally comprehensibly described in a standardised summary format in at least one official language of each country in which the fund is distributed (key investor information; Art. 80 et seq. UCITSA, Art. 93 et seq. UCITSO). This type of fund can also be configured as:
– an umbrella fund (Art. 2 para. 2 UCITSA, Art. 2 UCITSO), or
– an index fund (Art. 55 UCITSA, Art. 4 para. 2 UCITSO).
(legal basis: UCITS-Act, UCITS-Ordinance)
At present, we do not offer structures governed by the Investment Undertaking Act (legal basis: IU Act and IU Ordinance). Such structures are based solely on national legislation and therefore do not offer several of the key advantages associated with the AIF and UCITS frameworks. Moreover, any investment strategy that can be implemented within an IU structure can also be implemented within an AIF and/or UCITS structure, without the corresponding regulatory limitations.
As prescribed by law, the depositary function may only be performed by a bank domiciled in Liechtenstein. The right to employ sub‑depositaries or work with prime brokers is reserved. Usually, the core services of the depositary are:
– Subscription and redemption of fund units
– Safekeeping (custody) of the unit certificates and the fund’s assets
– Keeping the unit register
– Carrying out due diligence
– Monitoring the fund’s investment guidelines
– Execution and regulatory control of all the fund’s payment transactions
– Purchase and sale of all target investments (execution)
– Execution and monitoring of all settlements (corporate actions)
– Verification of the appropriation of profit
– Independent computation / plausibility‑testing of the net asset value (NAV)
– Plausibility‑testing of investors (in line with statutory requirements)
– Examination of initial constitutive documents of the fund
Potential partners include BDO / PWC / E&Y / Grant Thornton AG and others.
– Examination of the initial constitutive documents of the fund
– Ongoing audit of the fund and any associated publications
– Best-practice recommendations
The FMA is tasked with authorizing and approving investment funds. Additionally, it provides ongoing oversight of fund management companies, depositaries, certified auditors, and the managed investment funds, ensuring compliance and maintaining high industry standards.
Additional external service providers may include tax consultancy services, the provision of independent expert opinions, for example, in connection with the valuation of private equity or real estate assets, as well as support in the establishment of (holding) companies with a view to achieving more efficient management of equity interests and improved cash flow management within the fund structure. Where appropriate, such service providers may also assume governing officer functions, for instance, at the level of holding companies.
If you require further information, we at ONE Funds AG would be delighted to arrange a meeting in person.
