More than seven years after a slim majority (51.9%) of the UK electorate voted to leave the EU, Switzerland and the UK have agreed a deal that clears the way to more open cooperation in the financial services sector, helping to restore the pre-Brexit arrangement between the two nations.
On Thursday, Switzerland and the UK announced an agreement to improve trade in financial services between the two nations, reported RTS.
Although Switzerland is not an EU member it has agreements with Brussels that make it in many ways effectively a member. These agreements streamlined the flow of financial services trade between Switzerland and the UK when it was in the EU. However, once it left the bloc it’s legal and trade relationship with Switzerland changed. The two countries have been working on rebuilding trade ties since Brexit.
On 3 February 2021, the two nations introduced stock market equivalence, a rule that allows investment firms in either country to trade on the others stock exchange, effectively allowing access to the each other’s investor base. The latest deal adds to this by allowing cross-border trade in other financial services.
The new agreement was announced in Bern by Karin Keller-Sutter and Jeremy Hunt, the heads of finance for Switzerland and the UK on 20 December 2023. The Bern Financial Services Agreement, as it is known, covers investment services, insurance, wealth management and professional financial market services. Swiss wealth managers will now be able to offer investment advice to UK residents with wealth over GBP 2 million. And, UK insurance companies will be able to offer commercial non-life insurance products and services to Swiss companies.
From the beginning of 2024, foreign companies wishing to offer financial products and services in Switzerland will need to create a Swiss base. However, this week’s agreement with the UK will exempt UK companies from this requirement. The UK will be the only nation with such an exemption.
The agreement must now be approved by both the UK and Swiss parliaments before it can enter into force.
Trade in financial services between the two nations continues to grow. Between 2016 and 2022, trade rose 53% to more than GBP 3 billion.
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