FinIA Switzerland: the five institution licence categories

What the Swiss Financial Institutions Act regulates

The Financial Institutions Act (Finanzinstitutsgesetz, SR 954.1) is the statute that consolidated five previously separate licensing regimes into a single, coherent framework. Before FinIA, portfolio managers and trustees were regulated under the Anti-Money Laundering Act through Self-Regulatory Organisations, fund management companies and managers of collective assets were governed by the Collective Investment Schemes Act, and securities firms were regulated under a separate securities-dealer regime. The Act replaced that patchwork with a shared authorisation logic, graduated capital requirements that reflect the risk profile of each activity, and a formal supervision model applied uniformly across all five categories.

The Act's scope is defined by activity, not by the legal form of the entity. Any person who carries on one of the five activities on a commercial basis in or from Switzerland falls within its perimeter and must hold the corresponding FINMA authorisation. "Commercial basis" is read on the facts: regularity, organisation for profit and service to third parties are the usual indicators. The act applies whether the institution is Swiss-owned or foreign-owned; what matters is that the regulated activity is conducted from a Swiss entity with genuine local substance.

FinIA does not regulate the activities of banks, insurance companies or financial market infrastructures. Those institutions remain under their own prudential statutes: the banking, insurance and financial-market-infrastructure legislation respectively. The graduated cascade logic that operates within FinIA's own perimeter is described below.

FinIA and FinSA: two acts with different roles

FinIA and its companion statute, the Financial Services Act (FinSA), entered into force on the same date, 1 January 2020, and are designed to work alongside each other. The split is conceptually clean: FinIA regulates the institution (who is permitted to operate, on what capital and under what organisational standard), while FinSA regulates the service delivered to clients (what duties of care, documentation and disclosure apply when serving private clients, professional clients and institutional counterparties).

In practice, most FinIA-licensed institutions are also subject to FinSA obligations. A portfolio manager holds its FinIA authorisation as the licence to operate; it then applies FinSA rules whenever it provides investment advice or manages assets for an individual client. FinSA introduces the client-adviser register, which is a lighter registration for persons who provide investment advice or manage assets without the full discretionary mandate that triggers a FinIA licence. Pure advice without discretion does not need a FinIA authorisation, but the adviser still needs to register under FinSA. The two statutes complement each other: FinIA gates entry to the market, FinSA governs conduct within it.

The five FinIA institution categories

FinIA defines five institution categories in ascending order of activity scope, capital requirement and supervisory intensity. The table below maps each category to its core activity, its capital floor and its supervision model, as of July 2026.

Portfolio manager. The portfolio manager is the most common FinIA category. It authorises discretionary management of individual client portfolios held at a custodian bank: the manager directs the account, but the assets never sit on the manager's own balance sheet. This is why the capital floor is CHF 100'000 rather than a prudential buffer against trading risk. The category covers independent asset managers, external managers acting under mandate for private or institutional clients, and family offices serving parties beyond a single family on a commercial basis. For the detail, see the asset manager licence service page.

Trustee. The trustee licence authorises professional administration of trusts in or from Switzerland. Switzerland has no domestic trust in its civil law: trustees administer trusts settled under a foreign governing law, most often English, Jersey or Guernsey, which are recognised here under the Hague Convention on the Law Applicable to Trusts in force since 1 July 2007. The minimum capital is CHF 100'000, the same as for a portfolio manager, because trust assets are held in the trust itself and not on the trustee's balance sheet. The full requirements appear on the trustee licence service page.

Manager of collective assets. A manager of collective assets manages pooled vehicles: investment fund assets, the assets of collective pension schemes, or similar structures where capital from multiple investors is managed as a pool rather than as separate individual mandates. The minimum capital is CHF 200'000, higher than for a portfolio manager, reflecting the larger and more complex asset base typically involved and the heavier organisational requirements that accompany it. This category is supervised directly by FINMA, not through a Supervisory Organisation.

Fund management company. A fund management company manages collective investment schemes within the meaning of the Collective Investment Schemes Act. It operates at the intersection of FinIA and CISA: FinIA sets the institution requirements, while CISA governs the funds themselves. Fund management is among the more capital-intensive FinIA categories; the specific floor depends on the scope of the business and the types of fund managed, and FINMA supervision is direct.

Securities firm. The securities firm is FinIA's heaviest institution category, formerly known as the securities dealer. It authorises trading securities professionally: dealing for own account on a significant, market-relevant scale; quoting firm bid and offer prices as a market maker; underwriting issues on a firm-commitment basis; and executing securities trades in the name of clients. The minimum capital is CHF 1.5 million, and firms taking significant positions will need considerably more. Larger firms reach CHF 10 million and beyond in own-funds terms. Unlike portfolio managers and trustees, securities firms are supervised directly by FINMA without a Supervisory Organisation in between.

The licence cascade principle

FinIA's five categories are not parallel silos: under the Act's graduated architecture, a higher-category authorisation is generally structured to encompass the scope of the categories below it. Subject to the correct characterisation of the activity, a securities firm authorised at the CHF 1.5 million tier with direct FINMA supervision would not ordinarily need a separate portfolio-manager licence to undertake incidental discretionary management for individual clients, because the heavier authorisation operates to a higher threshold.

The practical implication is that a founder whose planned activity touches two FinIA categories does not always need two separate authorisations. The starting question is always: what is the primary, defining activity of the business? Where the primary activity is securities dealing, the securities-firm authorisation generally covers incidental portfolio management. Where the primary activity is portfolio management, and the firm later wants to execute orders for its own account on a significant scale, it has moved into the securities-firm category and needs the heavier licence. The cascade protects against both over-licensing (paying for authorisation you do not need) and under-licensing (operating a higher-category activity under a lighter licence).

The cascade has one important limit: it does not work in the opposite direction. A portfolio-manager licence does not authorise securities-firm activity. The lower category cannot substitute for the higher one, because the higher category exists precisely because the activity and the risks are different in kind, not merely in scale.

FINMA authorisation and ongoing supervision

FINMA is the granting authority for all five FinIA categories: every institution must obtain a FINMA authorisation before commencing the regulated activity. What differs across categories is the ongoing supervision model after the licence is granted.

For portfolio managers and trustees, FINMA operates a two-tier model. These institutions are licensed by FINMA but supervised day-to-day by a Supervisory Organisation: a FINMA-authorised body, such as AOOS or FINcontrol, that reviews the application before it reaches FINMA, then runs the periodic, risk-based audits afterwards. The SO audits cover both prudential compliance and anti-money-laundering supervision under the Anti-Money Laundering Act. Because the SO carries the ongoing AML supervision, a portfolio manager or trustee does not need a separate Self-Regulatory Organisation affiliation: the SO role includes that function. Joining an SO is therefore not optional: it is a condition of the licence, and the choice of SO is made as part of the application project.

For managers of collective assets, fund management companies and securities firms, supervision is direct: FINMA conducts the ongoing oversight without an SO intermediary. A securities firm is audited each year by a FINMA-recognised audit firm, and must report regularly to FINMA on its capital, own funds and risk exposures. The direct supervision model reflects the systemic and market-integrity dimensions of these activities, which require FINMA's full prudential attention rather than the delegated review that serves the lighter categories adequately. A fuller account of the authorisation process itself is in the FINMA authorisation process guide.

Across all five categories, the authorisation is not a one-time permission. The licence imposes ongoing obligations: maintaining the required capital and own funds, keeping qualified managers fit and proper, notifying FINMA or the SO in advance of material changes in ownership, management or business model, and running the compliance and AML functions throughout. The licence is granted on the understanding that the organisation behind it is maintained, not just assembled for the application and then allowed to lapse.

Capital and organisational requirements in brief

FinIA sets the capital floor for each category in proportion to the risk profile of the activity, and the organisational requirements follow the same graduated logic. Portfolio managers and trustees both need CHF 100'000 in paid-in capital, plus own funds of at least a quarter of fixed annual costs. The own-funds buffer ensures the institution can cover its operating costs through a period of reduced revenue without breaching the capital floor. Professional indemnity insurance is also required and runs alongside the capital, covering liability that is not reflected on the balance sheet.

A manager of collective assets sits at CHF 200'000: the larger asset base and the pooled nature of the investment mandate justify a higher floor than the bilateral-mandate activities below it. The securities firm stands at CHF 1.5 million as the statutory floor, with own-funds requirements that scale upward with the firm's actual risk exposures. The CHF 1.5 million is a minimum; the real capital requirement for a securities firm with meaningful trading positions will be determined by the own-funds model, not the floor.

On the organisational side, all five categories require qualified managers (as a rule two, each meeting the fit-and-proper standard for their specific activity), a risk-management function kept separate from the revenue-generating activity, internal controls and a compliance function, and a complete anti-money-laundering framework including a risk analysis, KYC policies, transaction monitoring and a designated AML officer. The weight of each element scales with the category: a portfolio manager's compliance function is proportionate to individual-mandate work; a securities firm's trading controls and capital-adequacy model are built to a prudential standard comparable to a small bank.

When no FinIA licence is required

Four activity types fall outside FinIA's perimeter: managing exclusively your own capital, acting as a genuine single-family office without commercial remuneration, providing pure investment advice without discretion, and operating a trading venue under the Financial Market Infrastructure Act. Each boundary carries its own conditions, and identifying them correctly matters as much as identifying which category applies.

Managing your own capital. A person or entity managing exclusively its own assets does not carry on a regulated activity under FinIA, because there are no third-party interests to protect. This applies to proprietary trading structures that genuinely trade only the founder's own capital and do not manage money for outside investors.

The single-family-office exemption. A genuine single-family office, managing assets solely for members of one family without remuneration from outside the family, falls outside the portfolio-manager licence. The boundary is read strictly: a family office that charges fees, manages assets for parties connected to the family by business rather than kinship, or extends its services to a second family has likely crossed the commercial threshold and needs the licence. This is one of the most commonly over-relied-upon exemptions; confirming it in writing before operating is the prudent step.

Pure investment advice without discretion. A firm that provides investment recommendations and analysis but does not execute trades or exercise any discretion over client assets is not carrying on portfolio management and does not need a FinIA authorisation. It may, however, need to register in the client-adviser register under FinSA: the two statutes divide the regulatory burden between them, and exiting FinIA does not mean exiting all regulation.

Professional trustee acting without remuneration. Acting as trustee occasionally and privately, without commercial intent and without remuneration, falls below the threshold at which the FinIA trustee licence applies. The professional threshold is read on the facts of regularity, organisation and fee; a trustee who acts once for a friend's family settlement is different from one who advertises and operates a trust practice.

Operating a trading venue. Operators of trading venues, multilateral trading facilities and organised trading facilities are not securities firms: they require their own authorisation as financial market infrastructures under the Financial Market Infrastructure Act, a different and wholly separate regime. A firm that matches client orders on a multilateral basis can cross from securities-firm activity into trading-venue territory, and the characterisation question has to be resolved before the application is filed, not after.

Identifying the right category before the application

FinIA's five categories carry different capital floors, supervisory models and application timelines, and the category selected at the outset determines all three: filing in the wrong one is the single most common source of delay and wasted cost in Swiss financial institution licensing. An application for a portfolio-manager licence that describes a securities-firm activity will fail. An application for a securities-firm licence submitted on behalf of a portfolio manager overstates the capital need and doubles the timeline. Category selection is not a formality to be resolved in the first paragraph of the application; it is the foundational decision that determines everything that follows.

In our advisory practice, we begin every FinIA mandate with a written activity characterisation: a description of what the client intends to do, assessed against the statutory definitions of each category, to produce a written conclusion identifying the correct licence or, where the activity spans categories, the applicable cascade. That written conclusion serves two functions. First, it records the reasoning so that if the SO or FINMA questions the category during review, the analysis is on file. Second, it prevents the client from spending months building a governance structure and an application file for the wrong licence. We then carry the application through the SO (for portfolio managers and trustees) or directly to FINMA (for the heavier categories), from the initial scoping to the authorisation decision.

Goldblum and Partners is an advisory corporate and fiduciary firm. We are not FINMA-licensed, not an SRO member and not a bank. We advise, structure and prepare the application file; our role is to build the file that passes the regulator's review, not to act as the regulated institution ourselves.