The regulation, which will go into effect on January 11th, 2027, is set to restrict the access of European customers to Swiss banks.
The rule in question is EU’s Capital Requirements Directive VI (CRD VI) and specifically Article 21c.
It bans banks in non-EU or EEA states – Norway, Iceland, and Liechtenstein – from providing services on a cross-border basis to clients inside the European Union/EEA without first establishing a locally authorised branch or subsidiary. (Switzerland is a member of EFTA but not EES).
Specifically, this means that certain banks and other financial institutions based outside the EU and EEA (hence Switzerland) will in general be required to have an authorised branch in these countries, in which they provide what the directive describes as ‘core banking services’.
These are deposit-taking, lending and providing guarantees/commitments.
In other words, a Swiss bank won’t necessarily be in a position to provide those services actively to a customer in an EU or EEA country without the appropriate authorisation.
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Will EU citizens who have their account in Swiss banks be impacted by this new rule as well?
As Switzerland is not an EU member state, it is not, per se, directly bound by the CRD VI.
However, the new regulation will impact Swiss banks and financial institutions in general whenever they conduct cross-border business or provide core banking services to clients inside the EU and EEA. (The only exception is neighbour Germany, which grants Swiss banks bilateral market access).
According to Swiss Risk Association, the regulation “will bring significant challenges for Swiss banks serving EU-based clients.”
For instance, they “will no longer be able to actively solicit those residing in the EU in order to offer them banking and financial services from Switzerland” – that is, restrictions similar to ones already in place vis-à-vis US-based clients.
However, the Swiss Banking Association points out that the CRD VI will “have no impact on the ability of EU clients to maintain existing accounts with Swiss banks or to apply for new ones. CRD VI does not introduce a general prohibition on EU clients holding bank accounts or custody accounts with Swiss banks.”
What this means is that the new directive will not affect current clients, as existing contracts entered into before July 11th of this year, will benefit from a grandfathering exemption.
Will this change in the future?
Switzerland is…banking on the new batch of the bilateral agreements.
If ratified, they will allow for better market access to financial services with individual, strategically important EU countries – as is currently the case with Germany.
