US and Switzerland end stalemate over client information

The terms of the new agreement gives the US Securities and Exchange Commission direct access to client information from Swiss firms. Keystone-SDA

The US and Switzerland have ended a years-long stalemate over sharing information about client investments, a step that will allow Washington greater visibility into assets held in the European banking hub.

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The agreement comes amid regulatory examinations of at least eight Swiss companies that do business through a US-regulated entity, said three people with knowledge of the matter. The US Securities and Exchange Commission’s examinations, which included smaller managers as well as larger investment group Vontobel, involved some on-site inspections in Switzerland in the past year, the people said.

The SEC said its examinations are not public and that it does not “confirm [their] existence or non-existence”.

Vontobel declined to comment.

Both countries have a complicated relationship over information about American clients, who long stashed assets in Swiss accounts to avoid US taxes. Swiss firms paid billions in penalties after the two countries reached a previous agreement over sharing information in 2013.

The US on Tuesday also lifted a moratorium on approvals of new Swiss investment advisers to pursue lucrative American wealth management business.

The SEC halted processing applications from Switzerland-based investment advisers in 2020 because of concerns about their ability to provide data the agency sought and the regulator’s own ability to conduct examinations on site, said a person familiar with the matter.

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“These applications have languished for too many years, and it is well past time that we resume this process,” said SEC chair Paul Atkins. “We look forward to expanding access to US capital markets.”

Tuesday’s announcement resulted from negotiations between Washington and Swiss financial regulators, the SEC said. The terms of the new agreement gives the US regulator direct access to client information from Swiss firms.

The SEC’s move follows booming demand by wealthy Americans both in the US and abroad to move assets to Switzerland amid uncertainty caused by Donald Trump’s administration.

Swiss companies hoping to tap into that demand have sought other ways to access the market, including acquiring existing SEC-registered companies.

The Swiss examinations began in the middle of last year and continued into this year. “The fact they chose such a large number and in several cases physically came to examine some documents is unusual,” one of the people closely involved in the situation said.

“The suddenness of the announcement is a surprise,” said Anne Liebgott, an expert on Swiss wealth management services for US citizens. “It is possible that the examinations of some SEC-licensed Swiss managers meant the regulator was able to get the information it had wanted for years and so no longer needed the moratorium.”

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