Before delving into the intricacies of Old Swiss Trust VS New Swiss Trust, I must emphasize my extensive experience as a Swiss lawyer spanning three decades. It’s crucial to clarify that despite the prevalent information circulating on the internet, Swiss Trusts do not actually exist as portrayed. Do not hesitate to contact us at connect@swissfintechpro.com
The term “Swiss Trust” was coined not by Swiss legal practitioners but by their American counterparts. It served as a clever marketing ploy aimed at capturing the attention of U.S. clients towards a specific category of Swiss financial service companies known as “other financial services companies” or Swiss SRO (Swiss Regulated Organizations). These SROs are entities tasked with overseeing other financial services companies under the purview of Finma (Swiss Financial Market Supervisory Authority).
It’s worth noting that while there may be numerous companies in Switzerland bearing the name “Swiss Trust” (approximately 78, to be precise), the name itself is merely a label. Just as naming my son “Einstein” wouldn’t imbue him with the genius of the renowned physicist, and slapping a Ferrari logo on a Ford Pickup wouldn’t transform it into a luxury sports car, the title alone doesn’t determine a company’s nature in Switzerland.
In Switzerland, a company’s classification as a financial service company is determined not by its name or or the objectives stated in its charter, but rather by the specific financial activities it is authorized or licensed to provide. Merely labelling your company as a “Swiss Trust” and outlining financial service objectives in your charter does not confer the authorization to offer financial services. In order to become a financial service company, authorization or supervision by an SRO, or licensing by Finma is mandatory.
Now as to Swiss Trust, what client that where buying Swiss Trust were looking for as features was a company that could provide financial services as follows:
Now, concerning Swiss Trust, clients seeking these entities were essentially looking for companies capable of offering specific financial services such as asset management, financial advisory services, bond issuance, precious metal and cryptocurrency trading, payment services, and exchange or credit business. Until the end of 2022, Swiss SROs had the capability to engage in all these activities.
However, a notable legal change occurred in 2023: Swiss SROs could still offer the listed services, but asset management services were no longer within their purview. They could, however, continue to function as financial advisors.
Old Swiss Trusts (Swiss SRO, Other Financial Services company): These entities retain the ability to provide financial services such as financial advisory services, bond issuance, precious metal and cryptocurrency trading, payment services, exchange, and credit business.
New Swiss Trusts (portfolio management company): This category can offer a broader range of financial services, including asset management, financial advisory services, bond issuance, precious metal and cryptocurrency trading, payment services, exchange, and credit business.
Do not hesitate to contact us at connect@swissfintechpro.com
