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08 September 2000
On July 24 2000 the Swiss Bankers Association's board of directors approved a revision of the association's Portfolio Management Guidelines of April 1996. The amended guidelines came into force on August 1 2000.
The main modifications are as follows.
According to Article 8 of the new guidelines, investment companies and other collective investment instruments, such as investment funds, banks' own funds and unit trusts, are now expressly regarded as common bank instruments. This means that they may be used within the scope of asset management mandates, provided that investments carried out with these instruments are themselves common bank operations or real estate investments. Pursuant to the new Article 10, collective investment instruments that provide for notice of termination to be given at least four times a year are classed as easily marketable instruments. They may thus be used in asset management mandates.
Pursuant to the new Article 12, asset managers may now diversify their clients' portfolios and include non-traditional products such as hedge funds, as long as certain conditions are fulfilled. In particular, the investment must take the form of a 'fund of funds' (ie, investment in one fund that invests into several other hedge funds) or a 'multi-manager' fund (ie, the fund is managed by various independent managers). In any case, the investments must be easily marketable, and carefully monitored and selected by the asset manager.
The previous version of the guidelines provided that when an asset manager was purchasing put options, the portfolio already had to hold a position in underlying securities at the conclusion of the contract. However, according to Article 13 of the new guidelines, this position in underlying securities will now only be necessary at the time that the options are exercised.
For further information on this topic please contact Thomas Keller or Guy-Philippe Rubeli at Pestalozzi Lachenal Patry's Geneva office by telephone(+41 22 80 94 500) or by fax (+41 22 80 94 501) or by e-mail (firstname.lastname@example.org or email@example.com). Alternatively, contact Robert Furter at Pestalozzi Lachenal Patry's Zurich office by telephone (+41 1 217 91 11) or by fax (+41 1 217 92 17) or by e-mail (firstname.lastname@example.org).
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