Jeremy Hunt signs ‘groundbreaking’ financial services agreement with Switzerland
Chancellor Jeremy Hunt has signed what he called a “groundbreaking” deal with Switzerland on financial services.
Hunt inked the UK’s signature on the Berne Financial Services Agreement on a visit to the European nation today, alongside counterpart Karin Keller-Sutter.
Banking trade body UK Finance said it was a “landmark agreement” which could pave the way for deals with other key global financial centres.
Jos Dijsselhof, chief of Switzerland’s principal stock exchange SIX told Morning Wire: “Compared to unilateral equivalence recognition, this mutual recognition agreement creates significantly greater legal certainty by placing mutual market access on a strong intergovernmental foundation, thereby facilitating the implementation of business decisions.
“All market participants benefit from this increased planning certainty.”
The deal — the first of its kind — will offer UK businesses unique access to the Swiss market and establish mutual recognition of domestic laws and financial services regulations.
It will enable frictionless, cross-border provision of financial services between the UK and Switzerland across asset management, banking and investment, HM Treasury says.
Speaking at a press conference in Berne today, Hunt said: “The agreement will bring unprecedented new market access, allowing firms to provide wholesale services into the Swiss domestic market, which will put our business at a competitive advantage.”
He added: “We are blazing a trail with an agreement with Switzerland, but we very much hope it can be a model for other agreements with other countries in the future.”
Asked about concerns from Swiss insurers about competition, Keller-Sutter said the issue was “a question of the interests of the entire economy”.
She said: “It is important for the attractiveness of the Swiss economy as a whole. We have one Swiss economy, there is one financial centre in Switzerland and financial institutes, the banks, may benefit a bit more here.”
Furthermore, Hunt added that the UK was “open to discussing… any areas of potential expansion”, including sustainable finance, but insisted the deal was a “significant step in its own right”.
He said: “I think this is a very strong foundation upon which to have further discussions in the future.”
The deal will mean, in some sectors, UK-based firms can serve Swiss clients while following UK rules, and vice versa, and secures unique access for British insurance brokers.
UK firms will be the only ones in the world exempt from new rules that any non-Swiss firms must establish a base in the country before serving Swiss clients.
And British financial advisers to high-net-worth individuals will no longer need to register with Swiss registration bodies to serve Swiss clients, sit exams or provide documentation.
Financial services are a growing area of cooperation between the UK and Switzerland. From 2016 to 2022, the market grew 53 per cent and reached £3.28 billion in 2022.
Miles Celic, CEO of TheCityUK, said the deal was a “significant milestone” and an “innovative framework” that “establishes a new and ambitious benchmark”.
It comes as business and trade secretary Kemi Badenoch continues to negotiate a Swiss free trade agreement, amid the UK’s aim to hit a trillion pounds of exports a year by 2030.