In December 2023, the UK and Switzerland signed a broad-reaching financial services recognition deal; the Berne Financial Services Agreement.
This deal is subject to ratification from both the UK and Swiss governments and will provide for the mutual recognition (and equivalence) of the regulatory and supervisory frameworks in each jurisdiction. It is intended to bolster the UK (and London in particular) in the post-Brexit era, and to boost trade with Switzerland. HM Treasury commented, in a statement of 21 December 2023: "the Berne Financial Services Agreement is only possible due to new freedoms granted to the UK following its exit from the EU" and "the agreement will enhance the UK and Switzerland’s already thriving financial services relationship."
The mutual recognition for the insurance market will be widely welcomed, as this will negate the need for UK insurers to establish a local presence in Switzerland to serve clients (which would otherwise be required under new Swiss legislation from 1 January 2024). This will allow UK brokers to continue to act cross border in Switzerland without interruption to their business.
Outside of the insurance market, FINMA-licensed Swiss banks (as well as asset and fund managers) will be able to provide certain investment activities and services without any further UK authorisation or registration requirements, provided certain thresholds are met. From the UK side, this removes the requirement for UK firms to navigate unfamiliar Swiss rules to access the Swiss market and to service corporate clients in Switzerland.
There are also benefits for derivative transactions and asset managers in relation to specific services provided in these sectors.
This agreement is a very welcome step forward and could pave the way for a more comprehensive trade deal between the UK and Switzerland.
For further information please see our latest Financial services matters insight in which this topic is covered.
