The UK and Switzerland – in the form of HM Treasury in the UK and the Swiss Federal Department of Finance - have recently agreed a joint statement on deepening co-operation in financial services.
The highlights of the joint statement are:
- an agreed ambition to conclude an international agreement that will enhance the cross-border market for financial services between the UK and Switzerland;
- a focus on the provision of services to wholesale and sophisticated clients in the fields of insurance, banking, asset management and capital markets (including market infrastructure);
- an agreement to work towards mutual recognition of each other’s regulatory and supervisory regimes in those areas, based on an outcomes based approach to mutual recognition, acknowledging that different approaches to financial regulation can achieve comparable overall aims;
- a commitment on the basis of recognition, reciprocity and enhanced regulatory and supervisory co-operation to seek to improve access for the cross-border provision of financial services for wholesale and sophisticated clients as well as to reduce or remove ongoing fictions applying to cross-border activity between the two jurisdictions; and
- an agreed willingness to avoid market fragmentation and build an open global financial system, deferring to each other’s national regimes and supervisory practices where they achieve comparable overall outcomes, specifically committing to:
- establish outcomes-based mutual recognition, providing rights for the provision of relevant financial services between the UK and Switzerland and reducing regulatory frictions;
- set up structures and safeguards to underpin those rights, including provisions for regulatory and supervisory co-operation; and
- create a clear, transparent and managed process in the event that recognition is withdrawn in the future or subsequently re-established.
Whilst much detail remains to be agreed between the UK and Switzerland, this seems very encouraging in terms of making it easier for Swiss banks and other financial services firms to service UK clients post-Brexit (and vice versa).
Switzerland and UK to negotiate a bilateral financial services agreement