Critique of Proposed Lex Koller Tightening on Foreign Real Estate Investment

The Swiss Federal Council proposes revising the Lex Koller to prohibit foreigners from purchasing Swiss real estate stocks and funds, aiming to protect domestic property markets. This measure, linked to the rejection of the 'No 10 Million Switzerland' initiative, targets approximately 80 billion francs in assets across 44 real estate funds. However, the proposal faces severe criticism from financial experts and industry associations for being practically unimplementable. Critics argue that real-time verification of a buyer's residency status is impossible in high-speed stock exchange trading, where beneficial ownership data is often delayed. The absence of a central register for Lex Koller status further complicates compliance. Legal and asset management experts warn that draconian fines will cause banks to halt trading entirely to avoid liability, effectively blocking market access. Additionally, the requirement to screen individual investors within collective investment vehicles like ETFs is deemed technically feasible, threatening the collapse of these financial products. The consultation period runs until mid-July 2026, with opponents describing the plan as bureaucratic overreach that delegates complex state regulatory tasks to private financial institutions without providing necessary infrastructure.