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The US and Switzerland have resolved a long-standing impasse regarding the sharing of client investment information, enabling Washington to gain better insight into assets located in the European banking center.
This agreement comes as the US is conducting regulatory reviews of at least eight Swiss companies operating through a US-regulated entity, according to several sources familiar with the situation. The reviews by the US Securities and Exchange Commission (SEC) recently involved both smaller firms and larger players like Vontobel and included some on-site assessments in Switzerland over the past year.
The SEC noted that these examinations are confidential and does not disclose whether they either exist or do not exist.
Vontobel has chosen not to comment.
The relationship between the two countries regarding American clients is intricate, as many have historically used Swiss accounts to evade US taxes. After a previous agreement on information sharing was established in 2013, Swiss firms faced substantial penalty payments.
Additionally, the US has lifted a ban on approving new Swiss investment advisors seeking to access the lucrative American wealth management market.
In 2020, the SEC paused the processing of applications from investment advisors based in Switzerland due to concerns regarding their capacity to provide required data and the agency’s ability to conduct onsite examinations, according to an insider.
“These applications have been delayed for far too long, and it’s time we move forward with this process,” stated SEC chair Paul Atkins. “We anticipate broadening access to US capital markets.”
The announcement made on Tuesday stemmed from discussions between US and Swiss financial regulators, as per the SEC. The terms of this new agreement grant the US regulator direct access to client information from Swiss firms.
This SEC action aligns with a rising interest among affluent Americans wanting to move their assets to Switzerland during the period of uncertainty created by Donald Trump’s administration. Swiss firms looking to meet this demand have explored alternative methods to access the market, including acquiring existing SEC-registered companies.
Reviews of Swiss firms by the SEC began in the middle of last year and continued into this year. “It is notable that they chose to examine such a large number of firms and, in some instances, conducted physical document reviews,” remarked one insider.
“The timing of the announcement is unexpected,” said Anne Liebgott, a specialist in Swiss wealth management services for US citizens. “It seems likely that the SEC’s examinations of certain licensed Swiss managers provided the necessary information it had sought for years, eliminating the need for the moratorium.”
