The case

On 18 December 2024 the members of the Upper Chamber deal with agenda item no. 24.046 Federal Act on the Transparency of Legal Persons and the Identification of Beneficiaries (TJPG). The whole of Switzerland’s financial marketplace will be affected by the consequences of this act.

Source: ABPS Newsletter No 35 / 29.11.2024 – & TJPG (in German)

The commentary

The draft bill plans for the creation of a centralized register, which has not been disputed. What has been causing some ripples is the fact that in its current version the draft entails a number of problems when implementing the law, which is why the fiduciary industry has proposed that article 35 from TJPG be deleted, for unless this is done, financial intermediaries have access to the register.

The access to this register must be the privilege of authorities only, i.e. the same must apply for access to the new register with the list of beneficiaries. Consultation via a financial intermediary does not make any sense and does not help them either. Further, financial intermediaries cannot be held responsible for the register to be kept correctly, for if they find mistakes, financial intermediaries have no way of forcing companies to correct these mistakes. The new register as well the Anti Money Laundering Act provide for different definitions for certain categories of companies (e.g. those that do not exercise any business activity), which entails systematic deviations and financial intermediaries are not responsible for reporting these deviations. Many a client is sensitive when it comes to the protection of their assets, and London and Luxembourg are the only the two competing marketplaces that grant financial intermediaries access to their registers. FATF does not require that financial intermediaries have access to the register.

Further, the register is of no use for financial intermediaries as the Anti Money Laundering Act forces them to check the relevant data.

Even though the draft law does not plan for this, both FINMA and auditors might check whether financial intermediaries have consulted the register on a regular basis and whether or not deviations have been reported. Even if the access for financial intermediaries is strictly limited, those that access the register can pass on data. The term “financial intermediaries” does not only include banks but also factoring companies and foreign exchange traders – and it would be easy to simply found a company in order to be granted access to the register.

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