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Berne Agreement ‘will boost UK financial services’

Jeremy Hunt
Jeremy Hunt: global first

Chancellor Jeremy Hunt has signed the Berne Financial Services Agreement, a first of its kind pact that aims to strengthen business ties between the UK and Switzerland.

Under the agreement the two countries will recognise each other’s domestic laws and regulations on financial services, making it easier for corporate and high net worth clients in the two markets to do business with each other. 

It enables the frictionless, cross-border provision of financial services between the UK and Switzerland across areas such as asset management, banking, and investment services.

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.

It will help level the playing field for smaller firms, who will no longer have to invest time and money in navigating unfamiliar Swiss rules.

The Treasury says the agreement is only possible due to new freedoms granted to the UK following its exit from the European Union. It says it will enhance the UK and Switzerland’s already thriving financial services relationship. Between 2016 and 2022, UK trade in financial and insurance services with Switzerland grew by 53% – reaching £3.28 billion in 2022. 

In 2020, around 40% of financial services to Switzerland were exported from UK regions outside of London and the South East.

Separate to the Berne Financial Services Agreement, the UK is also currently negotiating an enhanced Free Trade Agreement with Switzerland that will boost ties and cover the full range of trade between the two countries. 

Mr 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.” 

Sandy Begbie: help for Scotland

Sandy Begbie, chief executive of Scottish Financial Enterprise, said: “This agreement provides a welcome boost to our sector; potentially improving market access, reducing barriers and providing regulatory certainty between UK firms and Switzerland.

“As our recent sector growth strategy identified, the strength of London as a leading global financial centre is a real asset to our sector in Scotland and anything that helps boost trade and cut compliance costs is a positive step for our sector.

“Although the deal focusses initially on certain areas of activity – including asset management and insurance – the possibility of broadening its scope in the years to come to areas such as sustainable finance is to be welcomed.”

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