Switzerland and UK Sign Berne Financial Services Agreement

Switzerland and the United Kingdom have signed the historic “Berne Financial Services Agreement” (BFSA), aimed at creating more efficient and competitive conditions for cross-border trade in financial services between the two countries. This landmark deal is the first of its kind, recognising the equivalence of legal and regulatory frameworks in key financial sectors between two nations.

The BFSA simplifies market access for financial institutions from both countries, allowing them to operate more freely across borders. The agreement also strengthens regulatory and supervisory cooperation, ensuring financial stability, market integrity, and client protection.

The negotiation process for the BFSA was a thorough and collaborative effort, characterised by a shared openness to innovation and new ideas. The agreement covers various areas of financial services, including banking, investment services, insurance, asset management, and financial market infrastructures, with a focus on sophisticated clients.

Swiss financial service providers, particularly in wealth management, will now be able to offer cross-border services to UK clients with assets over £2 million. Additionally, UK insurers will have new opportunities to provide non-life insurance services to large corporate clients in Switzerland, although certain types of insurance, such as accident, health, and liability, are excluded from the agreement.

While Swiss insurers already have access to the UK market, this agreement reaffirms and expands their ability to offer cross-border services under existing UK regulations.

What sets the BFSA apart is its innovative approach to cooperation between two major economies, applying long-standing concepts of financial regulation in an unprecedented international treaty. Historically, cross-border financial services have been challenging to navigate due to complex regulatory environments, but the BFSA breaks new ground by facilitating smoother market access and mutual recognition of each country’s financial frameworks.

The BFSA is not just a practical agreement—it symbolises a new era of collaboration between Switzerland and the UK. Both countries have committed to fostering open and resilient financial markets, positioning themselves as leaders in global financial innovation. The agreement also serves as a model for other like-minded nations seeking to open their markets to cross-border trade in financial services.

However, the BFSA is not yet in force. It requires approval from both Swiss and UK parliaments, and mechanisms are in place to expand the agreement’s scope over time.

The agreement balances ambition with risk management by recognising each country’s regulatory and supervisory frameworks and fostering deeper cooperation in wholesale financial services, which include services for professional and sophisticated clients. This cooperation is supported by a robust governance structure, ensuring that comparable outcomes are achieved in both markets.

In some areas where access already exists, the BFSA solidifies those pathways. In others, it introduces new opportunities by leveraging the principle of “deference,” allowing firms to provide cross-border services based on the regulations of their home country.

A key element of the BFSA is its commitment to financial stability and market integrity. Switzerland and the UK have enhanced traditional processes of international recognition of equivalence by adding stability measures and safeguards, giving businesses a more secure foundation to plan long-term operations under the new agreement.

One of the greatest challenges in drafting the BFSA was balancing the goal of expanding cross-border access with maintaining each country’s sovereignty over domestic financial stability and market integrity. To address this, the agreement incorporates a layered risk management approach, backed by enhanced supervisory cooperation, which ensures both countries have access to the necessary information to manage risks effectively.

The Berne Financial Services Agreement sets a new standard for conducting cross-border financial business and opens the door for future expansions, offering a forward-thinking blueprint for international financial cooperation.