Banking Commission urges openness
The Swiss Federal Banking Commission has urged the government to amend laws so it can ease the exchange of information with foreign securities watchdogs.
Switzerland should revise existing laws to facilitate international efforts to combat stock exchange fraud, Switzerland's top banking and securities regulator said in a statement on Wednesday.
"An international financial centre needs to be able to cooperate efficiently with its foreign counterparts. Legislation which is incompatible with this basic premise must be amended," it said.
The announcement follows intensified efforts to crack down on criminal fiscal activities in the wake of the September 11 attacks in the United States.
The Commission is confident that renewed pressure from the international community will pave the way for a more open policy in information exchange.
The Commission's demands follow a decision taken by the Swiss Federal Court in connection with an investigation of suspected insider dealing in shares of the Dutch group, Elsag Bailey Process Automation NV, before it was acquired by the engineering group, ABB.
The Court's decision left the Swiss regulators "unable to grant administrative assistance to the US Securities and Exchange Commission (SEC)," the Banking Commission said.
"Swiss legislation governing conditions for cooperation between the Swiss Federal Banking Commission and foreign supervisory authorities in matters of insider trading and stock market offences have proved to be inadequate," it continued.
"It was clear in that case (Elsag/ABB) that one should have been able to exchange information. There have been similar cases in the past," said Banking Commission spokeswoman Tanja Kocher.
If such legislation is passed, it would not directly affect Swiss banking secrecy.
A change in law is a pre-requisite to Switzerland acquiring greater access to international financial markets. If current restrictions on information sharing are retained, Banking Commission director Daniel Zuberbühler said he feared for the consequences for Switzerland's foreign markets.
He warned that Swiss banking transactions could be undermined and other preventative measures might be brought into place by foreign markets.
The Banking Commission is pressing to bring this issue before the Swiss Finance Ministry and to put it on the government's agenda. The Swiss Senate has put forward a motion for less restricted judicial assistance.
In the meantime, the Commission has advised the SEC to explore other ways of obtaining collaborative help in stock exchange matters.
Switzerland's strict banking secrecy laws is a thorny issue in discussions between the non-European Union member and its EU neighbours, which want to ease banking privacy to curb tax evasion.
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