AMCs in Portfolio Management Mandates

What FINMA Guidance 03/2026 requires in practical terms.

On 3 June 2026, FINMA published its Supervisory Guidance 03/2026. Among other matters, it highlights the growing use of Actively Managed Certificates ('AMCs') in asset managers' portfolios. Such managers frequently resort to in-house products, to products regulated or registered in jurisdictions whose supervision is not recognised as equivalent, and to structures that are not subject to supervision. In several cases, these risk profiles have led to serious failings, in which complex, high-risk or illiquid products were sold to retail clients, or used within an ongoing portfolio-management or investment-advisory relationship, without any sufficient assessment of the suitability of those investments, without regard to the risk capacity and risk appetite of the clients concerned, and without those clients being clearly informed of the risks they were incurring.

An observation made in respect of banks since 2022

Guidance 03/2026 reflects what FINMA first observed in relation to banks during the earliest on-site supervisory reviews following the entry into force of the FinSA, which gave rise to enforcement proceedings and, subsequently, to formal codification in FINMA Circular 2025/02.

2022 Annual Report : "On-site supervisory reviews showed that financial service providers which relied exclusively on their own investment products in the solutions they offered, or which favoured those products over third-party products, often drew insufficient attention to this point and gave their clients little information about the associated risks and conflicts of interest." (FINMA Annual Report 2022, p. 40) (RA FINMA 2022, p. 40)

2024 Annual Report : "FINMA called on banks to adapt their processes and documentation accordingly. Information provided to clients on conflicts of interest must not be generic, nor 'buried' in the general terms and conditions." (FINMA Annual Report 2024, p. 45) (RA FINMA 2024, p. 45)

Conclusion of the Leonteq proceedings : CHF 9.3 million was confiscated on account of insufficient oversight of the distribution chain and cooperation with unregulated distributors. "The business model of [Leonteq] consists essentially in selling structured investment products issued by itself or by its partners." (FINMA Annual Report 2024, p. 73) « Le modèle d’affaires de [Leonteq] consiste essentiellement à vendre des produits de placement structurés émis par elle-même ou par ses partenaires. » (RA FINMA 2024, p. 73)

FINMA Circular 25/02 : the requirements relating to proprietary products are formally codified at margin nos. 23–25.

An AMC is not a fund

As regards AMCs, it should be recalled that an AMC is a structured product within the meaning of Art. 3 let. a FinSA and therefore a debt instrument. The investor is a creditor of the issuer; the investor holds no rights over the underlyings, enjoys no regulatory protection and benefits from no redemption obligation. In the event of issuer default, the investor accordingly bears the risk up to the point of total loss.

An AMC may replicate, identically, the strategy of an actively managed fund. While the financial outcome may be comparable, the risk profile borne by the investor is not. That distinction must be reflected in the documentation, in the client classification and in the suitability assessment.

The typical 'Strategic Advisor' scenario

A common situation is that of a portfolio manager within the meaning of Art. 17 FinIA who both carries on discretionary portfolio management for clients and acts as 'strategic advisor' to the issuer of an AMC whose assets it actively manages.

This business model entails several risk factors:

• Unauthorised activity where the manager does not hold an authorisation within the meaning of Art. 17 FinIA;
• Activity not covered by the organisational rules approved by FINMA;
• Conflicts of interest between the 'strategic advisor' role and discretionary management or advice;
• Double dipping without clear disclosure to the client;
• Insufficient suitability documentation;
• inappropriateness of the product with the client's risk capacity and risk appetite;
• Deficient risk management where issuer due diligence is absent or inadequate, in particular in the case of foreign SPVs;
• Money laundering where the issuer is domiciled in a jurisdiction that does not provide an AML standard equivalent to that of Switzerland.

What Guidance 03/2026 requires

Guidance 03/2026 highlights four requirements that were systematically absent in the cases identified:

• An objective selection process (Art. 24–28 FinSO, margin no. 24 FINMA Circular 25/2): the selection criteria apply identically to proprietary instruments and to third-party instruments. No incentive-based remuneration may favour in-house products.
• Explicit client disclosure of conflicts of interest (Art. 25–26 FinSA, margin no. 25 FINMA Circular 25/2): the client's attention must be specifically drawn to the conflicts of interest arising from the use of proprietary financial instruments.
• Issuer due diligence (Art. 12 para. 4 FinIO): the jurisdiction, prudential status, custody arrangements and audit position must be analysed and documented by the manager. Issuers without equivalent supervision, and AMCs with crypto underlyings, call for particular attention, notably in light of FINMA Guidance 01/2026.
• Suitability documentation reflecting the risk profile of a structured product: issuer risk, limited liquidity, absence of any redemption obligation, and so forth.

In conclusion

With its Supervisory Guidance 03/2026, FINMA reminds portfolio managers of what it has observed in relation to banks over several years: recourse to in-house products, and to AMCs in particular, is not prohibited, but it must always be undertaken in the client's interest.

To ensure that clients' interests are best served, it is enough for the manager to adopt certain organisational and transparency measures, which do no more than give concrete effect to the rules of the mandate, namely: (i) the duty of care and loyalty, (ii) the duty to render account and to make restitution, and (iii) the duty to comply with the client's instructions.

Sources: FINMA Guidance 03/2026 (3 June 2026) · FINMA Circular 25/2 (1 January 2025) · FINMA Annual Report 2024 (p. 73) · FINMA Annual Report 2022 (p. 40) · FINMA Guidance 01/2026 · SSPA Recommendations regarding AMCs · SBA — Risks Involved in Trading Financial Instruments, section 3.4 (June 2023)