Regulation

What are the main elements of financial regulation in Switzerland?

The Swiss financial sector is regulated on three levels:

• everal federal laws fix a framework of activity for banks and other traders in securities (the federal banking law, the federal law governing stock markets and securities trading, the federal law on collective capital investments, the federal law on money laundering);
• the Federal Banking Commission, as supervisory authority, has decreed circulars specifying in detail the principles fixed by the above-mentioned laws;
• in the area of self-regulation - and with the support of the Swiss Bankers Association – the banks have signed a convention relating to the duty of diligence which imposes strict obligations regarding the identification of an account holder and its beneficial owner. The Swiss Bankers Association has also promulgated directives concerning asset management mandates as well as a code of conduct for securities traders.

 
 
Is Switzerland an offshore centre?

 
Based on not very transparent criteria, the International Monetary Fund (IMF) thought it fit to put Switzerland on the list of financial centres it considers to be "offshore centres". Both the Swiss National Bank and the Federal Banking Commission have, quite rightly, officially contested the application of this term to the Swiss financial centre. The two authorities have pointed out that Switzerland has supervisory bodies that conform to international standards, that financial institutions not physically present in Switzerland may not work in the country and that the supervisory bodies have unlimited access to banking information. By applying the same criteria as the IMF, namely the volume of financial operations carried out by non-residents, then other large international centres like New York and London should appear on this list of "offshore centres".