Switzerland and the UK have signed a new Bern Financial Services Agreement (BFSA) to create more efficient and globally competitive conditions for cross-border trade in financial services.
This agreement marks the first time that the two countries have entered into an international agreement on the equivalence of their legal and regulatory frameworks in selected financial areas.
This enables or simplifies access to the counterparty’s market, complemented by enhanced regulatory and supervisory cooperation, and ensures stability, integrity and protection of customers.
The path to this landmark treaty has been a meticulous one between the two countries, marked by openness and a willingness to explore new ideas.
mutual recognition
The agreement includes recognition of equivalence in the areas of banking, investment services, insurance, wealth management and financial market infrastructure for sophisticated customers.
In the case of financial services, particularly asset management, Swiss providers will be able to engage in cross-border activities.
In the future, we will be able to provide cross-border services directly to UK private customers with assets in excess of £2 million.
In terms of insurance, the agreement covers some areas of non-life insurance business for large corporate customers and allows UK insurers to engage in cross-border activities.
The agreement specifically excludes accident, health, most types of liability insurance, and all types of exclusive insurance for professional policyholders.
Swiss companies are already able to provide cross-border insurance services to large corporate customers under current UK law and this is explicitly confirmed by the agreement.
While not all the concepts used in the BFSA are inherently new, the way they are brought together and applied to an international treaty is unprecedented and demonstrates the innovative capacity of both economies.
This has historically been a difficult feat when it comes to cross-border transactions in highly regulated sectors such as financial services.
A model of cooperation between like-minded countries
The signing of the BFSA marks the beginning of an exciting new chapter in Swiss-UK relations.
The agreement not only expresses a shared commitment to fostering open and resilient financial markets, but also demonstrates the readiness of both countries to lead and innovate on the world stage.
The BFSA could serve as an example of cooperation between like-minded countries committed to market opening.
The agreement requires approval by both countries’ parliaments before it enters into force. It includes mechanisms that allow you to expand your coverage over time.
We balance our ambitions with the common goal of effective risk management, provide the basis for recognition of regulatory and supervisory frameworks and strengthened cooperation in financial services, and ensure that a large part of wholesale financial services, i.e. professionals and agreements covering services for professionals. Sophisticated trading partners supported by a comprehensive governance framework.
The agreement provides for mutual recognition where comparable results are achieved, based on a thorough evaluation of each other’s regulatory and supervisory frameworks.
In some cases, where UK and Swiss wholesale markets are already open, the agreement will confirm existing access.
In addition to confirming existing access, others may be using the principle of ‘respect’ to provide genuinely new opportunities for cross-border business.
This means that companies in sectors such as insurance and investment services can primarily provide cross-border services while relying on the familiar rules and supervision of their home jurisdiction.
Manage financial stability and market health
Switzerland and the UK are leveraging the strengths of established processes for international recognition of equivalence, complemented by efforts to strengthen stability in governance frameworks and appropriate protection mechanisms, which This means that the new access that companies will enjoy under the agreement will be even more sophisticated. With stable footing, you can plan for the long term.
One of the most challenging aspects of this agreement is achieving this ambitious cross-border package while preserving each sovereign ability to manage risks to domestic financial stability and market integrity without compromising domestic financial stability and market integrity risks. It was to do.
Under the Bern Financial Services Agreement, both countries have developed a multi-layered approach to risk management to overcome this challenge.
Central to this is a process of enhanced supervisory cooperation to ensure adequate access to information on both sides to effectively manage risks to the market.
All these efforts have established new standards for conducting cross-border financial business.
The agreement includes mechanisms that allow coverage to expand over time.
Finance.swiss details: Switzerland and UK sign agreement on mutual recognition in financial services | Finance.Switzerland
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