Switzerland and the UK move closer together as financial centers
Published: Thursday, Dec 21st 2023, 17:01
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The financial centers of Switzerland and the United Kingdom are moving closer together. Federal Councillor Karin Keller-Sutter and her British counterpart, Jeremy Hunt, signed an agreement on the mutual recognition of financial services in Bern on Thursday.
The agreement covers the recognition of equivalence in the areas of banking, investment services, insurance, asset management and financial market infrastructures for professional clients, as was reported in a statement issued by the Federal Department of Finance (FDF) on Thursday.
In the area of financial services, in particular wealth management, Swiss providers will be able to operate across borders. Based on the agreement, British private clients with assets of over GBP 2 million can be served directly across borders in future.
In the insurance sector, the agreement covers individual areas of the non-life insurance business for large corporate customers, in which British insurance companies will be able to operate across borders in future. In the area of investment management, the agreement confirms the existing access for the advertising and offering of collective investment schemes as well as the delegation of portfolio management and risk management.
Keller-Sutter emphasizes pioneering character
Speaking to the media, Keller-Sutter emphasized the benefits of the agreement. It will help to maintain and strengthen the international competitiveness of the Swiss financial center in the long term, she said. The two countries had been negotiating for more than two years.
For the first time, two countries have mutually recognized the equivalence of their respective legal and supervisory frameworks in selected areas of the financial sector on the basis of an in-depth review, according to the Department of Finance in Bern, which emphasized the pioneering nature of the agreement.
Hunt: model for further agreements
The British Chancellor of the Exchequer, Hunt, described this Berne Financial Services Agreement as groundbreaking and a model for further agreements.
"This agreement would not have been compatible with EU membership," said the finance minister of the country that left the European Union just over three years ago. Brexit formally took place on February 1, 2020.
For the City of London, the financial district of the British capital and one of the most important financial centers in the world, the agreement now concluded with Switzerland in Bern is also very beneficial, according to Hunt. After Brexit, there was an exodus of financial institutions from London.
Economiesuisse: laying the foundation stone
The business umbrella organization Economiesuisse expressly welcomed the agreement and pointed out that it had "laid the foundations for this new approach" together with various industry associations in both countries, as stated in a press release on Thursday. From a macroeconomic perspective, the agreement has "clear positive benefits" and strengthens the Swiss financial center.
The Swiss Bankers Association, the Asset Management Association and the stock exchange operator SIX also expressed their satisfaction. The United Kingdom (England, Scotland, Wales and Northern Ireland) is one of the most important export markets for the cross-border asset management of Swiss financial institutions, they said in a joint statement.
Following the signing of the agreement, the Federal Council will prepare a dispatch and submit it to Parliament. The parliaments of both countries must approve the agreement before it enters into force.
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