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UK And Switzerland Sign 'Global First' Financial Services Accord, Further Strengthening Their Relationship

The chancellor has branded the new arrangements as a "global first" and announced their intention to strengthen links between the UK and Switzerland in the financial services sector.


 


It is based on the mutual recognition of laws and market rules in both nations and aims to enhance access to each other's markets while decreasing compliance costs.


 


 


According to the Treasury, the "ground-breaking pact on financial services cooperation" known as the Berne Financial Services Agreement could only come to fruition due to the "freedoms" the UK currently enjoys due to its exit from the EU.


 


The agreement, as stated by the Treasury, "enables the frictionless, cross-border provision of financial services between the UK and Switzerland across areas such as asset management, banking, and investment services."


 


"In some industries, it implies that a UK-based corporation can provide services to Swiss clients while mostly adhering to UK regulations, and vice versa," the Treasury stated.


 


Under this deal, British insurance agents will also have exclusive access to the Swiss market.


 


Non-Swiss companies must establish a presence in Switzerland by the beginning of 2024 to do business with Swiss customers.


 


"The UK will be the only country in the world not required to do this, putting British brokerage firms at a significant advantage to international competitors as they can continue to do business as they always have done."


 


Even though Switzerland is no longer a member of the European Union, the regulations that govern the UK's relationship with Switzerland in the financial services sector are nevertheless based on those rules.


 


The UK's trade with Switzerland in financial and insurance services increased by 53% from 2016 to 2022, reaching £3.28bn in 2022, according to figures from the Treasury.


 


After Brexit, the UK could only lose that access if a direct treaty existed.


 


London lost some business to other EU capitals after Brexit, as the European Commission and member states sought to reduce their reliance on London as a financial hub.


 


On Wednesday, the Financial Conduct Authority unveiled its ideas to streamline and expedite the listing process for companies.


 


It was said to be the biggest shake-up of its sort in thirty years to make London more competitive with other hubs for company flotations, such as New York.


 


Parliament must yet approve the Switzerland accord before it can take effect, but there is talk of future expansion to include other trade agreements.


 


"The Berne Financial Services Agreement is a global first and builds on the UK and Switzerland's strengths as two of the world's largest financial centers," Chancellor Jeremy Hunt said.


 


"It cements open access for financial services between our two nations for decades to come, helping us grow the economy and serving as a blueprint for future agreements with other key trading partners."


 


"This innovative framework not only simplifies engagement in financial services, reduces barriers, and enhances efficiency, but it also strengthens market confidence and fosters innovation," said Miles Celic of the TheCityUK lobby group.


 


It establishes a new and ambitious benchmark for how major financial centers can collaborate to establish gold-standard agreements, contributing to a more resilient, competitive, and interconnected global financial landscape.


 


Edited by: Marina Ramzy Mourid


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Tags: #UK #Switzerland #Business #Global First



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