The U.K. and Switzerland are deepening the ties between their financial services sectors with a new post-Brexit deal.
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LONDON — The U.K. and Switzerland on Thursday signed a post-Brexit financial services deal designed to bring two of Europe’s largest banking centers closer together.
British Finance Minister Jeremy Hunt told CNBC that the “first-of-its-kind” deal was a win for post-Brexit Britain that “wouldn’t have been possible to sign” inside the European Union.
He added that the mutual recognition accord, dubbed the Bern Financial Services Agreement, would provide a “blueprint” for future deals with other countries.
“This is a new type of trade agreement that we can use as a model for future agreements that we have with other markets as well,” Hunt said during a press conference announcing the deal.
Hunt was in Bern to sign the agreement with his Swiss counterpart, Karin Keller-Sutter, who said it would “boost the international competitiveness” of both markets over the long-term.
The deal, which follows more than two years of negotiations, aims to streamline business ties between financial firms and wealthy individuals in the two markets, and improve cross-border access to a range of financial services sold by banks, insurers and asset managers.
More specifically, it will allow Swiss firms to serve wealthy individuals within the U.K., either locally or cross-border, replicating privileges currently available to British firms in Switzerland. U.K. advisors will also be permitted to “temporarily serve” wealthy clients locally in Switzerland without registering in the country.
The terms also include new equivalence arrangements for the provision of certain cross-border activities by financial services providers and insurers in both Switzerland and the U.K.
Hunt described the plans as a “light-touch, progressive, future-leaning way of opening up market access” which would provide a significant boost for the City of London.
The deal will need be approved by parliaments in both countries before entering into force next year. However, some commentators were optimistic that it would mark an improvement on the equivalence framework Britain had with Switzerland while in the European Union.
David Henig, U.K. director at independent think-tank the European Centre for International Political Economy, said the deal was “broadly good news” which would leverage Britain’s heft in the financial services sector.
U.K. Prime Minister Rishi Sunak initially launched talks with Switzerland in 2020, when he was finance minister, claiming that the accord would demonstrate the countries’ shared vision of an “open, global and free” economy.
The current Conservative government in Britain has long positioned signing new trade deals as a key benefit of Brexit. In June, Britain signed a deal to join an 11-nation Asia-Pacific free-trade bloc that includes Australia, Singapore, Japan and Canada, marking its third new trade deal since formally exiting the bloc on Jan. 31, 2020.