LONDON — The U.K. and Switzerland have signed a financial services deal described as the “first of its kind” by British Chancellor Jeremy Hunt.
The mutual recognition agreement will allow British firms from some financial services sectors — including banking and asset management — to operate in Switzerland while still following the U.K.’s regulatory rulebook. The same will be true of Swiss firms operating in Britain.
Hunt said it was based on the the “deference principle” and would not require U.K.-Swiss regulatory alignment for financial services.
The deal also gives British insurance firms unique access to the Swiss market, as they will be exempt from incoming rules that will force overseas insurers to have a physical base in the country.
Speaking at a press conference alongside Swiss Finance Minister Karin Keller-Sutter, Hunt said the Bern Financial Services Agreement will allow British and Swiss firms to “plan and invest with certainty.”
“I hope it provides a blueprint for future mutual recognition agreements,” he said. “I think it’s a signal to all other countries that we are open to doing a deal that boosts choice and competition.”
Negotiations for the deal had been launched in 2020 by Rishi Sunak when he was chancellor. It forms part of the U.K.’s efforts to boost the City of London’s global competitiveness following the country’s departure from the EU, which have also included sweeping reforms to the country’s financial services rulebook.
The U.K.’s Conservative government has seen Switzerland as a potential partner in a number of post-Brexit deals owing to the similarities of the two service-based economies.
Negotiations for a comprehensive U.K.-Switzerland Free Trade Agreement remain ongoing.
