In December 2023, the UK signed the Berne Agreement with Switzerland. The agreement uses outcomes-based mutual recognition of domestic laws and regulations to enable cross-border trade in financial services for wholesale and sophisticated clients.
HM Government will seek to implement and ratify the agreement in due course, in line with UK domestic parliamentary processes. The agreement has to be approved by the parliaments of both countries before it can come into force and the likely date for this to happen is not yet known.
At the heart of the agreement is a new and innovative model of mutual regulatory recognition. This is intended to provide stability for UK businesses supplying financial services to clients in Switzerland and it supports new market access secured through the agreement. It will also reduce regulatory barriers for the sectors it covers, making doing business with Switzerland easier than before.
The agreement builds on the liberalised access UK firms have into the Swiss investment services market by introducing commitments designed to stabilise the access routes currently available to service institutional and professional clients, including high net worth individuals. This deal ensures that it will be easier than before for client advisers acting on behalf of UK firms to provide services directly to their clients whilst in the territory of Switzerland. Client advisers will no longer need to be registered by Swiss registration bodies, nor will they have to prove to these bodies that they meet the requirements necessary to provide their services to private clients in Switzerland. This will do away with the need to sit examinations and provide documentation relevant to the registration process.
HM Government has also built on the UK’s cross-border investment services regime under the Markets in Financial Instruments Regulation (MiFIR) to provide Swiss investment services firms with a new access offer to the UK market. Whilst the access granted is similar to Article 47 of UK MiFIR, HMG has made two major improvements to the framework within the offer. It has granted Switzerland access in a way that allows for other forms of access to the UK’s domestic market to remain open; this means that Swiss firms will have the choice of continuing to rely on the overseas persons exclusion or using this agreement to service clients in the UK. It has also created a new and bespoke mechanism for Swiss firms to do business with sophisticated high-net-worth investors. This has been designed to ensure access to these clients by Swiss firms will come with appropriate disclosures to clients, but at the same time, will broaden the choice available to sophisticated UK clients.
Links: https://www.gov.uk/government/publications/the-berne-financial-services-agreement