AMCs for Institutional Investors: The Regulatory Framework and What Pension Fund CIOs Need to Know

Actively Managed Certificates have established themselves in Switzerland as a vehicle for actively managed investment strategies. What has long been a familiar structure in private banking is now attracting attention from institutional investors, particularly pension funds seeking efficient ways to implement their investment strategy. For pension fund CIOs, this raises questions that differ substantially from those facing private investors: regulatory classification, counterparty exposure, investment regulations and operational requirements.

An Actively Managed Certificate (AMC) is a structured product issued by a supervised entity, whose underlying portfolio is managed on a discretionary basis during the term in accordance with a defined investment strategy. Legally, it is a debt instrument: investors hold a claim against the issuer, not a share in the managed assets. An AMC is not a collective investment scheme within the meaning of the Collective Investment Schemes Act (CISA).

Key Points at a Glance

• Structured product, not a fund: An AMC does not fall under the CISA. Investors bear issuer risk, not fund risk.
• Issuer risk is the core risk: If the issuer defaults, partial or total loss is possible regardless of portfolio performance. Whether and under what conditions collateral security (COSI) reduces issuer risk depends on the issuer and the product structure.
• Investment regulations are decisive: Pension funds may hold AMCs only if the instrument is explicitly permitted in their investment regulations. The governing framework is BVG/BVV2 (Occupational Pension Ordinance 2) and OAK BV guidance.
• FinSA obligations depend on the offering route: Structured products are subject to the Financial Services Act (FinSA). A public offering to retail clients requires a prospectus and a key information document; a Private Placement directed exclusively at professional or institutional investors is exempt from these obligations.
• Issuers with regulatory authorisation: AMCs may only be issued in Switzerland by supervised institutions, typically banks. Everon works as AMC Advisor with issuers including UBS and Goldman Sachs.

What Is an AMC, and How Does It Work?

An Actively Managed Certificate tracks an index whose composition is adjusted on a discretionary basis during the term in accordance with a defined investment strategy. The mechanics: the issuer implements the strategy synthetically. An AMC Advisor, in Everon’s case, can alter and rebalance the underlying’s composition within the parameters of the defined strategy. Investors participate in the performance of that underlying through the certificate.

What distinguishes an AMC from a collective investment scheme is its legal structure: in a fund, investors hold a share in collective assets that are segregated from those of the management company. In an AMC, by contrast, investors hold a claim against the issuer. In the event of insolvency, the underlying portfolio is in principle not ring-fenced. In Switzerland, certain collateralisation options exist via pledged security (known as COSI certificates), which can reduce issuer risk. Conditions and scope are governed by SSPA recommendations and the issuer’s documentation.

How Does Swiss Law Classify AMCs?

An AMC is a structured product falling under the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). It is not a collective investment scheme under the CISA; the distinction follows the principle of “form over substance”. In borderline cases between an AMC and a collective investment scheme, a prior legal assessment or clarification with FINMA is advisable.

Issuance is the responsibility of supervised institutions, typically banks. Issuers such as UBS and Goldman Sachs hold the regulatory authorisation and the infrastructure required for the legally sound issuance of AMCs in Switzerland. Everon, acting as AMC Advisor, handles strategy development and ongoing portfolio support, while issuance itself is carried out by the issuer.

When offering to retail clients publicly, a prospectus and a key information document must be prepared under FinSA, and the product may only be distributed by or with a guarantee from a supervised institution. For a Private Placement directed exclusively at professional or institutional investors, the prospectus and key information document requirements do not apply.

Of particular relevance is FINMA Circular 2025/2 on conduct obligations under FinSA/FinSO (in force since 1 January 2025). It expressly treats AMCs as distinct financial instruments where the asset manager or investment advisor materially co-designs the underlyings, and requires corresponding information and conflict-of-interest disclosure obligations.

Are Pension Funds Permitted to Invest in AMCs?

The question of admissibility is the first practical hurdle for pension fund CIOs. The governing legislation is the Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG) together with the Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans (BVV2, Occupational Pension Ordinance 2), which govern investment rules for pension institutions.

AMCs fall within the category of structured products and therefore into a category requiring specific examination under the investment rules. The key considerations include:

• classification into the permissible asset categories under the applicable investment rules
• limiting issuer risk within counterparty concentration limits
• the liquidity requirements of the pension institution
• compatibility with the investment strategy and investment regulations

An AMC may be permissible for a pension fund if the investment regulations explicitly provide for it and the investment meets the qualitative and quantitative requirements of the applicable rules. The investment regulations are not a formality: they are a binding framework approved by the board of trustees and reviewed by the auditor.

What Role Does Issuer Risk Play in Practice?

Issuer risk is the structural core issue for AMCs in the institutional context. Because the AMC is legally a debt instrument, repayment depends on the issuer’s solvency, not solely on the portfolio’s performance. This distinction must be captured explicitly in internal risk management.

In practice, this means the following for pension fund CIOs:

• Monitor issuer creditworthiness: the issuer’s rating is not a static figure at the point of initial investment, but an ongoing parameter to be observed.
• Observe counterparty limits: exposure to a single issuer is limited in most investment regulations. An AMC adds to that limit.
• Assess collateral solutions: pledged security structures (COSI) can reduce issuer risk. Whether and in what form they are available depends on the issuer and the product structure.
• Ensure documentation: due diligence on issuer selection must be traceable, both for internal governance and external review.

Everon supports institutional investors with structural classification and issuer selection, ensuring regulatory and qualitative requirements are met. This includes working with issuers such as UBS and Goldman Sachs, who have established the infrastructure for AMC issuance in the Swiss market.

What Are the Operational Requirements?

An AMC brings operational demands that must be planned for internally. The main points:

Investment regulations: The AMC must be listed as a permissible instrument in the pension institution’s investment regulations. Without this foundation, an investment is impermissible regardless of the economic arguments.

Accounting and reporting: AMCs must be accounted for as structured products. Reporting to the auditor and the competent regional occupational-pension supervisory authority must transparently disclose the exposure.

Ongoing monitoring: Issuer creditworthiness, compliance with the defined investment strategy and counterparty concentration must be monitored on an ongoing basis. This requires either internal capacity or the involvement of a qualified partner.

Due diligence documentation: The selection of the issuer and the AMC Advisor must be documented. Internal compliance and external review require a traceable decision basis.

Everon, in its role as AMC Advisor, takes on ongoing portfolio support and provides the necessary documentation for internal and external review. This reduces the operational burden on the pension fund.

Frequently Asked Questions on AMCs for Institutional Investors

Are Swiss pension funds permitted to invest in AMCs?

In principle, yes, provided the AMC meets the supervisory requirements and the board of trustees explicitly permits it in the investment regulations. The key consideration is how the instrument is categorised under the Federal Council’s investment rules. The governing legislation is the Federal Act on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG) together with its implementing ordinances. Admissibility depends on, among other factors, asset category, issuer rating, counterparty exposure and liquidity requirements. This does not constitute investment advice.

What is the primary risk of an AMC from a pension fund perspective?

The central risk is issuer risk: an AMC is legally a debt instrument of the issuer. If the issuer defaults, partial or total loss is possible regardless of the portfolio’s performance. This distinguishes an AMC fundamentally from a collective investment scheme, where fund assets are segregated from those of the management company. Pension funds must manage this exposure within their counterparty limits. This does not constitute investment advice.

How does an AMC differ from an investment fund from a regulatory standpoint?

An AMC is a structured product and not a collective investment scheme within the meaning of the Collective Investment Schemes Act (CISA). Investors hold a claim against the issuer, not a share in fund assets. This has implications for accounting treatment, counterparty risk management and asset category classification. For pension funds, the key question is how the AMC is categorised under the applicable investment rules. This does not constitute investment advice.

What operational requirements does an AMC place on a pension fund?

AMCs require internal capacity for ongoing monitoring of issuer risk, correct accounting as a structured product, and reporting to the auditor and the competent regional occupational-pension supervisory authority. Additional requirements apply to the investment regulations, which must explicitly cover the instrument, and to the due diligence process for issuer selection. This does not constitute investment advice.

What role do UBS and Goldman Sachs play as AMC issuers for institutional investors?

UBS and Goldman Sachs are among the established issuers in the Swiss AMC market. For institutional investors, issuer quality is a central selection criterion because issuer risk directly affects the security of the investment. Both institutions hold the regulatory authorisation and the infrastructure for AMC issuance. Everon acts as AMC Advisor working with selected issuers and supports institutional investors with structural classification. This does not constitute a recommendation for specific issuers.

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This does not constitute investment advice. The tax and legal treatment of AMCs may change and depends on the individual circumstances of the pension institution. Pension fund CIOs should coordinate the classification with their auditor and qualified legal counsel.