Swiss and UK fi­nance in­dus­tries join forces to urge new model for trade

Switzer­land and the UK rank among the strongest fi­nan­cial cen­tres and biggest ex­porters of fi­nan­cial ser­vices world­wide. At the same time, they share a long-stand­ing and close eco­nomic re­la­tion­ship. These bi­lat­eral ties could be largely se­cured in the con­text of the UK hav­ing left the EU through a se­ries of bi­lat­eral agree­ments signed be­tween De­cem­ber 2018 and Feb­ru­ary 2019. As valu­able as these agree­ments are, a fur­ther deep­en­ing of mar­ket ac­cess for FRPS providers be­tween both coun­tries can only be achieved by a new trade agree­ment.

New po­si­tion paper on strength­en­ing trade re­la­tions for fi­nan­cial ser­vices

In re­cent months, economiesu­isse and TheCityUK have de­vel­oped a joint po­si­tion paper in this re­gard with the sub­stan­tial sup­port of the rel­e­vant sec­tor as­so­ci­a­tions of the fi­nan­cial and in­sur­ance in­dus­try in both coun­tries. It out­lines the key in­dus­try pri­or­i­ties in this con­text and pro­vides sub­stan­tial input to both gov­ern­ments: "The chal­lenge posed by the corona virus means that we must work harder than ever to keep in­ter­na­tional mar­kets open and allow trade flows to con­tinue”, says Monika Rühl, Chair­woman of the Ex­ec­u­tive Board of economiesu­isse, adding: "That is why we should now take a step for­ward in our bi­lat­eral re­la­tion­ship with the UK.”

Im­prove frame­work con­di­tions for cross-bor­der fi­nan­cial ser­vices as the main ob­jec­tive

Given the com­pa­ra­bil­ity of the Swiss and UK ap­proach to fi­nan­cial mar­ket reg­u­la­tion and over­all su­per­vi­sory frame­works, the prin­ci­ple of fi­nan­cial ser­vices equiv­a­lence as ap­plied by the EU would not be suit­able for any fu­ture bi­lat­eral arrange­ment be­tween Switzer­land and the UK. In­stead, mar­ket ac­cess to allow the cross-bor­der pro­vi­sion of fi­nan­cial ser­vices should be ex­panded in var­i­ous areas. These in­clude bank­ing and in­vest­ment, asset man­age­ment, in­sur­ance and fi­nan­cial mar­ket in­fra­struc­ture. The key prin­ci­ple should be mu­tual recog­ni­tion based on com­pa­ra­ble out­comes, rather than on a line-by-line com­par­i­son of the re­spec­tive reg­u­la­tory and su­per­vi­sory regimes. In ad­di­tion, a fu­ture agree­ment should also cover is­sues such as data and cyber se­cu­rity. Miles Celic, CEO of TheCityUK, com­ments: "We have the op­por­tu­nity here to set a new gold stan­dard for global ser­vices trade be­tween two sov­er­eign na­tions."

Mem­o­ran­dum of Un­der­stand­ing to be signed as soon as pos­si­ble

As soon as pos­si­ble, Switzer­land and the UK should sign a Mem­o­ran­dum of Un­der­stand­ing. This should in­clude a com­mit­ment to deepen in­sti­tu­tional, reg­u­la­tory and su­per­vi­sory co­op­er­a­tion, strengthen global fi­nan­cial reg­u­la­tory stan­dards and a joint ap­proach to sup­port in­creased lib­er­al­i­sa­tion of trade in ser­vices at the global level. In ad­di­tion, the agree­ment should pro­vide a road map to­wards a be­spoke bi­lat­eral agree­ment, out­lin­ing a man­date and time­frame as well as the in­volve­ment of the su­per­vi­sory au­thor­i­ties and the in­dus­try. With re­gards to the shared in­ter­ests of Switzer­land and the UK and the great po­ten­tial in bi­lat­eral fi­nan­cial ser­vices trade and in­vest­ment, this agree­ment can be achieved swiftly and be a win-win for both coun­tries.

Read the po­si­tion Paper