UK lays legislation to implement Berne Financial Services Agreement

The draft Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025 have been laid before Parliament and published with a draft explanatory memorandum. The Regulations seek to implement the UK's commitments under the Berne Financial Services Agreement (BFSA), signed with Switzerland in December 2023. The BFSA is an outcomes-based mutual recognition agreement covering a range of wholesale financial services, such as asset management, banking, investment services, insurance and financial market infrastructure, as well as investment services to high-net-worth and sophisticated individuals.

The draft Regulations will implement aspects related to the provision of investment services into the UK by Swiss firms by introducing: (i) a new exemption under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and a corresponding exemption under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; (ii) a public UK Financial Conduct Authority (FCA) register of eligible Swiss firms; (iii) a new category of firm permitted to operate in the UK under the BFSA framework; and (iv) new powers and duties to UK regulators (including the FCA, UK Prudential Regulation Authority and Bank of England) to manage risks, enforce compliance and oversee an orderly wind-down of Swiss firms' UK activities if the Agreement is terminated.

The Regulations will come into force on 1 January 2026. The FCA has also published a new webpage outlining the operational framework for Swiss firms under the BFSA and issued a press release highlighting the Agreement's role in unlocking cross-border market access while maintaining regulatory standards. The OTC Derivatives Risk Mitigation and Central Counterparties (Equivalence) (Switzerland) Regulations 2025 implement other aspects of the BFSA. You may like to watch our webinar of 3 July in which our lawyers discuss the BFSA.

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