In a recent decision the Federal Supreme Court of Switzerland had to decide whether the Swiss Federal Banking Commission was allowed to grant administrative assistance (ie, exchange of information) to the French commission for stock exchange activities. On the basis of this case the Federal Supreme Court defined the conditions under which Swiss authorities may submit confidential information to foreign authorities.

Pursuant to Article 38 of the Federal Stock Exchange Statute, the Swiss supervisory authority may only provide foreign supervisory authorities with information that is not publicly available and documents related to the matter under examination if these authorities:

  • use such information exclusively for direct supervision of stock exchanges and trading and securities;

  • are bound by official or professional secrecy ; and

  • do not transmit the information to competent authorities, and to bodies entrusted with supervisory tasks which are in the public interest, without the prior approval of the Swiss supervisory authorities, or on the basis of a blanket approval contained in a treaty (if any) between Switzerland and the foreign country concerned. The transmission of information to criminal prosecuting authorities is not permitted if administrative assistance in criminal matters would be excluded. The supervisory authority shall make its decision after consulting with the Federal Office of Police.

The Federal Supreme Court authorizes the granting of administrative assistance to a foreign supervisory authority as long as that authority guarantees and respects the protection of professional secrets connected to facts, activities and information of which it learns during its activities. In the case at hand the Federal Supreme Court determined that the French commission for stock exchange activities would respect confidentiality in the sense of Article 38(2) of the Stock Exchange Statute. Therefore, the Swiss Federal Banking Commission was authorized to grant administrative assistance.

Further, according to Article 38(3) of the Stock Exchange Statute, a foreign authority requesting administrative assistance that wishes to transmit the information with which it has been provided to any non-penal authority must first obtain the consent of the Swiss Federal Banking Commission. This restriction of subsequent transmissions of information ensures that the Swiss Federal Banking Commission will not lose control over the exploitation of the information, in particular after its transmission to a foreign supervisory authority. In fact, foreign authorities are not required to provide restricting declarations in compliance with international public law. However, they are obliged to undertake to respect the principle of best practices. Where a foreign authority cannot respect this principle because of its internal legislation or because of a court decision which it can not oppose, the Swiss Federal Banking Commission shall refuse assistance.

Article 38(3) of the Stock Exchange Statute finally authorizes the transmission of information to foreign criminal authorities only if the conditions for administrative assistance in criminal matters are fulfilled. This will usually be decided first by the Federal Office of Police.

For further information on this topic please contact Guy-Philippe Rubeli at Pestalozzi Lachenal Patry by telephone (+41 22 80 94 500) or by fax (+41 22 80 94 501) or by e-mail ([email protected]

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