Swiss Federal Commission Calls For Changes In Banking Secrecy Laws

by Ulrika Lomas, Tax-News.com, Brussels

29 April 2002

In yet another twist to the current Swiss debate over banking secrecy, the country's Federal Banking Commission has announced that it wants to introduce provisions to make information exchange with foreign securities regulators easier in order to prevent the misuse of the Swiss banking sector.

The banking watchdog made the announcement at a press conference in Bern on Thursday, explaining to reporters that the recommendations had come about partly as the result of international pressure from the OECD, the EU, and the International Commission of Securities Commissions. The federal regulator revealed that it would be sending its proposals to Finance Minister Kaspar Villiger, the government, and parliament for consideration.

Speaking to the Swissinfo news service on Friday, Director of the Banking Commission, Daniel Zuberbuhler, explained that although banking secrecy is an integral part of the country's financial sector, certain provisions can be overly restrictive when dealing with international securities regulators:

'Our legal provisions are too narrow and make it very complicated and recently as we've seen in the case of the Federal Supreme Court impossible even to grant information to the United States Securities and Exchanges Commission, which is clearly not what the legislator had intended.'

He added that the country's finance sector needed to meet international standards, and that a failure to do so could have an adverse impact on the jurisdiction's reputation, and its access to foreign markets.

'In an extreme case, a foreign regulator might say that he didn't want Swiss banks acting on his exchange because he did not get the information needed on transactions to find out if there had been abuse,' he warned.

Mr Zuberbuhler also told the news service that the Federal Banking Commission was seeking to extend its 'rather limited' ability to impose sanctions when dealing with insider traders who are not banks or securities firms. He explained that under current rules:

'We cannot take any sanction against private insiders. We can only refer them to the prosecutor, so we could make a criminal referral, but that's it.'

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