UK and Switzerland deepen ties through ‘global first’ financial services deal

UK and Switzerland deepen ties through ‘global first’ financial services deal
  • PublishedDecember 22, 2023

Chancellor Jeremy Hunt says the UK’s £254bn financial services sector will benefit from enhanced ties in several key areas, boosting the wider economy.

The chancellor has signed a deal aimed at boosting financial services ties with Switzerland, describing the arrangements as a “global first”.

It is aimed at boosting access to each other’s markets, cutting compliance costs and is based on mutual recognition of laws and market regulations in both countries.

The Treasury said the Berne Financial Services Agreement marked a “ground-breaking pact on financial services cooperation” that was only possible because of the “freedoms” now enjoyed by the UK through its departure from the European Union.

The deal “enables the frictionless, cross-border provision of financial services between the UK and Switzerland across areas such as asset management, banking, and investment services,” its statement said.

“For certain sectors it means that a firm based in the UK will be able to serve clients in Switzerland while largely following UK rules, and vice versa.

“The agreement also secures unique access for British insurance brokers to the Swiss market.

“From the start of 2024, Switzerland will require any non-Swiss firms to establish a base in the country before serving Swiss clients.

“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.”

The UK’s financial services relationship with Switzerland was previously based on EU rules despite Switzerland being a non-member of the bloc.

Karin Keller-Sutter and Jeremy Hunt shake hands during a press conference after signing of the agreement mutual recognition in financial services between Switzerland and the United Kingdom, in Bern, Switzerland
Pic:Keystone/AP
Image:Jeremy Hunt and his Swiss counterpart Karin Keller-Sutter shake hands after signing the agreement in Bern. Pic: AP

Between 2016 and 2022, UK trade in financial and insurance services with Switzerland grew by 53%, according to Treasury figures, reaching £3.28bn in 2022.

The UK had risked losing that access in the wake of Brexit without a direct treaty.

The departure from the EU saw London lose some business to EU capitals amid efforts among member states and the European Commission to ease their dependence on London as a financial centre.

The Financial Conduct Authority revealed plans on Wednesday to simplify and speed up company listings.

It was billed as the biggest shake-up of its kind in three decades to help London compete better with New York and other centres for company flotations.

The Switzerland deal remains subject to parliamentary approval but it could, potentially, be expanded in future to cover wider trading arrangements which remain under discussion.

Chancellor Jeremy Hunt said: “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 centres.

“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.”

Miles Celic, who heads the TheCityUK lobby group, added: “This innovative framework not only simplifies engagement in financial services, reduces barriers, and enhances efficiency, but it also strengthens market confidence and fosters innovation.

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

SOURCE: SKYNEWS

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