UK legislation to implement Berne Financial Services Agreement published 

The Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025 have been published, accompanied by an explanatory memorandum. The Regulations will make changes to UK legislation 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, including asset management, banking, investment services, insurance and financial market infrastructure, as well as the provision of investment services to sophisticated high net worth clients. The BFSA allows UK insurance companies to offer certain wholesale insurance services in Switzerland without needing Swiss authorisation, while Swiss firms can offer certain investment services to sophisticated clients in the UK without requiring UK authorisation.

The 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 to allow Swiss firms that are registered with the FCA for specific investment services to supply those services without authorisation; (ii) a corresponding exemption under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 to ensure that Swiss registered firms can engage in financial promotion in certain circumstances without requiring authorisation or approval; (iii) a public UK Financial Conduct Authority (FCA) register of eligible Swiss firms; (iv) a new category of firm permitted to operate in the UK under the BFSA framework; and (v) new powers and duties to UK regulators (including the FCA, UK Prudential Regulation Authority (PRA) and Bank of England) to manage risks, enforce compliance and oversee an orderly wind-down of Swiss firms' UK activities if the BFSA is terminated. A draft of the Regulations was laid before Parliament in July. The Regulations will enter into force on 1 January 2026. HM Treasury also published a de minimis impact assessment outlining the expected costs, benefits and regulatory implications of implementing the policy.

On the same day, the FCA and the PRA jointly published guidelines to assist firms considering providing services under the BFSA. The guidelines clarify expectations, outline operational considerations, and help ensure compliance with relevant regulatory standards.

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