Two of the world’s leading financial markets are growing together: The Berne Financial Services Agreement (BFSA) will facilitate mutual market access for financial institutions across the UK and Switzerland through a unique framework of mutual recognition combined with strengthened regulatory and supervisory cooperation.

The agreement and its sectoral annexes were signed on 21 December 2023 by Switzerland and the UK, see our earlier article on the broader context and background. After having been approved by the Swiss and the UK parliament earlier this year, the BFSA is about to be ratified by the governments and will enter into force on 1 January 2026. Implementation initiatives have accelerated:  

  • In September 2025, the Swiss Financial Market Supervisory Authority (FINMA), the Bank of England (BoE), and the Financial Conduct Authority (FCA) signed a Memorandum of Understanding to apply the BFSA in practice and enhance supervisory cooperation.
  • In October 2025, the finance ministries of both countries issued a joint statement agreeing on the establishment of a Joint Committee and procedures for regulatory cooperation. Additionally,
  • In November 2025, FINMA published guidelines detailing implementation steps, including notification and reporting requirements for Swiss and UK firms, clarification of mutual recognition procedures and documentation standards for cross-border investment and insurance services.

The BFSA will enter into force on 1 January 2026 following ratification by both governments. Financial services actors will thus be able to take advantage of the new cross border market accesses in early 2026.

The milestones

The BFSA is not an isolated development. Rather, it is the product of strategic legal alignment dating back to the post-Brexit transition.

Key milestones included the UK-Switzerland Insurance Agreement (2019). This agreement ensured continuity for reinsurance and other insurance services post-Brexit, replicating terms of the EU-Swiss Insurance Agreement. It notably provides mutual recognition of each country’s insurance and solvency regulations for non-life insurance (such as household, liability, motor vehicle, travel insurance). Life insurance is not covered by the agreement. The agreement allows insurance companies to establish and operate branches of one country in the other.

In 2020, the Services Mobility Agreement facilitated the short-term provision of services by professionals across borders, including legal and financial consultants. It effectively enabled cross-border temporary movement of key financial services personnel – such as compliance officers, auditors, and risk specialists – on a contractual basis, thereby reducing barriers for advisory firms and investment managers operating internationally.

Also in 2020, a Joint Statement on Financial Services expressed the political commitment to develop an enhanced agreement based on mutual recognition of regulatory outcomes, diverging from the traditional EU-style equivalence model. It outlined a shared intent to prioritize market efficiency, proportionality, and investor protection without imposing dual compliance burdens.

In 2021, a non-binding Memorandum of Understanding on Regulatory Dialogue established a bilateral forum for continuous regulatory engagement, enabling UK and Swiss regulators – primarily the FCA, the Prudential Regulation Authority (PRA), and FINMA – to coordinate on supervisory practices, information exchange, and regulatory developments. It institutionalized cooperation at the technical level, setting the stage for the stronger, legally binding commitments later incorporated into the BFSA.

These bilateral milestones laid the groundwork for deeper cooperation under the BFSA.

A unique model of mutual recognition

The BFSA marks a shift from equivalence to deference. Unlike the EU’s equivalence model, based in a unilateral, revocable assessment of whether third-country rules achieve comparable outcomes (see Arts. 46–47 of the Markets in Financial Instruments Regulation (MiFIR) and the Capital Requirements Regulation (CRR) provisions), the UK-Swiss BFSA is based on mutual recognition. The BFSA principle of regulatory deference allows firms to operate cross-border under their home-country rules and supervision. For example, a UK firm supplying wholesale financial services into Switzerland remains subject to UK regulation, without being subject to Swiss licensing or supervision. This eliminates the need to navigate dual regulatory regimes, reducing compliance burdens and supervisory duplication. Each jurisdiction acknowledges the other’s regulatory and supervisory framework as sufficiently robust, without requiring substantive alignment or convergence.

In contrast to the UK-Swiss BFSA, the European Commission may withdraw its recognition of equivalence with little notice (e.g. MiFIR Art. 47(1)). This has created legal uncertainty, as shown by the 2019 withdrawal of equivalence for Swiss exchanges based on the European Commission's decision on 30 June 2019 not to renew the stock market equivalence that had been previously granted to Switzerland under Article 23 of MiFID II (Directive 2014/65/EU) – for purely political, not regulatory reasons.

The BFSA permits each party to adapt its domestic rules independently (Arts. 2–5), provided core standards of market integrity and investor protection remain intact. Regulatory divergence is not grounds for automatic access restrictions. Instead, parties are required to engage through structured dialogue (Art. 7) before taking any restrictive steps. For instance, if the UK modifies Environmental, Social, Governance (ESG) rules under the Financial Services and Markets Act 2023, or Switzerland evolves its Distributed Ledger Technology (DLT) framework, mutual access persists so long as firms comply with home-state requirements. The BFSA’s main legal and operational components include:

Mutual recognition of regulations

Under the agreement, firms licensed and regulated in the UK (by the FCA or PRA) and Switzerland (by FINMA) can provide services in the other jurisdiction, provided they comply with their home regulatory standards. This eliminates the need for duplicative licensing requirements.

Sector-specific applications

The agreement covers various financial services sectors, including asset management, insurance, and market infrastructures. The sectoral annexes clarify whether the relevant financial services are permitted based on (i) deference, (ii) domestic law or (iii) other arrangements. For example, UK asset managers operating UCITS or AIF funds, insurers etc. will benefit from simplified procedures for distributing funds to Swiss professional clients. Similarly, Swiss financial service providers can more easily offer services in the UK without additional regulatory hurdles.

Regulatory cooperation

Both countries have committed to ensuring the regulatory frameworks for these sectors remain aligned, with regular dialogue and updates on regulatory changes. This cooperative approach reduces the risk of regulatory divergence that could disrupt cross-border financial activities.

Sustainable finance provisions

Article 12 of the BFSA establishes a framework for UK-Swiss cooperation on sustainable finance. It commits both parties to jointly develop high-quality, internationally comparable standards for climate-related corporate disclosures and to align financial flows with the goals of the Paris Agreement. The article also promotes bilateral and multilateral transparency efforts regarding climate alignment and encourages improvements in the regulatory environment for green digital financial technologies. Furthermore, it sets the stage for future negotiations to mutually recognise sustainability-related rules and standards, including the role of private finance in achieving net-zero emissions. Supervisory authorities are expected to maintain ongoing dialogue.

The BFSA benefits business activities and market participants, particularly in the areas of banking services, asset management, insurance services, stock exchanges and other financial market infrastructures.

Benefits for financial market actors

For UK and Swiss financial services providers, the following benefits outlined in the sectoral annexes of the BFSA are particularly noteworthy:

Asset managers

The BFSA confirms the existing access for advertising and offering collective investment schemes, the delegation of investment decisions and portfolio risk management. This agreement merely confirms the current status quo and does not introduce any material changes to the existing situation regarding cross-border activities.

Under the agreement, as was already the case previously, UK asset managers may continue to market foreign collective investment schemes to qualified investors in Switzerland without requiring FINMA product approval. For products offered to high-net-worth individuals who have opted out of retail investor protection, a local representative and a paying agent must continue to be appointed. In addition, the BFSA affirms the ability of licensed UK service providers to provide portfolio and risk management services with regard to collective investment funds to Swiss asset managers within the UK regulatory framework. The provisions also extend to occupational pension schemes and insurance companies.

In turn, Swiss firms benefit from the UK’s national private placement regime (NPPR), which allows them to market alternative investment funds (AIFs) to UK professional investors without full FCA authorisation. The BFSA further confirms that Swiss asset managers may delegate portfolio and risk management functions to UK firms, provided those UK firms meet the applicable Swiss regulatory requirements.

Banks

Under the BFSA, Swiss banking institutions may provide cross-border deposit-taking and lending services into the United Kingdom without obtaining an additional UK banking license, provided they remain subject to FINMA supervision and comply with home-country requirements. The same reciprocal access applies to UK banking institutions offering such services into Switzerland (which was already the case before the BFSA). This regime is limited to wholesale and professional clients and does not extend to retail banking  activities. Licensing and approval requirements continue to apply for the establishment of local subsidiaries or branches and for acquisitions of interests in local banking institutions.  

Financial market infrastructures, central counterparties

The BFSA further covers clearing services of financial market infrastructures such as central counterparties (CCPs) as well as direct participants/clearing members. Previously, UK CCPs of derivatives transactions needed FINMA authorisation, including a review of the UK’s regulatory regime, while Swiss CCPs operated in the UK under a temporary post-Brexit regime. Under the BFSA, both countries now mutually recognize each other’s regulatory and prudential frameworks, removing the need for duplicative regime assessments. Individual recognition by local authorities remains required, but the process is significantly streamlined.

OTC derivatives

The BFSA also facilitates cross-border activity in over-the-counter (OTC) derivatives contracts by mutually recognising the respective risk mitigation rules.

Trading venues

With regard to trading venues, mutual recognition facilitates dual listings and cross-border clearing by removing duplicative regulatory requirements for wholesale transactions. UK-based trading venues such as the London Stock Exchange (LSE) can now admit Swiss-listed companies using Swiss-approved disclosure documents, subject only to jurisdiction-specific add-ons, without requiring a full UK prospectus review. Conversely, UK firms listing on the SIX Swiss Exchange benefit from reduced procedural burdens under FinSA and CISA, including relief from duplicative filings.

The improvements regarding trading venues come with a limitation: They apply exclusively to wholesale listings, i.e., those targeting professional clients and eligible counterparties. Switzerland, listings only accessible for professional clients are rare and only to be found at the smaller of the two stock exchanges, BX Swiss.

Retail listings remain outside the scope of the BFSA and continue to require full compliance with host-country rules. However, it may be mentioned that under the Swiss prospectus regulation, offering and listing prospectuses approved under UK law are generally deemed approved under Swiss law (art. 54 sec. 3 FinSA in connection with the list SIX Prospectus Office of countries whose prospectus approvals are recognised).

Insurers, reinsurers and insurance intermediaries

The BFSA simplifies the provision of insurance and reinsurance services between the UK and Switzerland. UK insurers regulated by the Prudential Regulation Authority (PRA) can offer services to Swiss clients without needing additional local regulatory approval. The general Swiss licensing requirement for foreign insurance company insuring Swiss risks is thereby derogated. A UK-based insurer may therefore underwrite insurance in Switzerland without undergoing a separate FINMA registration, provided it complies with PRA prudential standards. For Swiss insurers providing cross-border services to the UK, there are no changes, and they may continue to operate under the existing laws as before.

However, the scope of the BFSA only includes larger professional policyholders and corporate clients. Life insurance, accident & health insurance, monopoly and business interruption insurance remain excluded from the scope of the agreement.

To the extent, the licensing requirement of UK insurance companies for insuring Swiss risks is derogated, also insurance intermediation from the UK is exempt from Swiss registration requirements and the requirement to establish a Swiss entity.

Before conducting business under the BFSA in Switzerland, UK insurers must be listed on FINMA’s public register. Registration requires prior notification to the UK supervisory authority, which reviews compliance with BFSA requirements and informs FINMA within 30 days. Once approved, FINMA adds the insurer and its permitted insurance classes to the register. Insurers must also make pre-contractual disclosures to clients and submit annual reports to FINMA.

The BFSA relieves UK untied insurance intermediaries from the requirement to maintain a Swiss office when offering their services in Switzerland. However, they must register with FINMA. Registration and annual reporting are completed via FINMA’s EHP platform. Intermediaries must comply with Swiss disclosure rules, informing clients before contract conclusion about their responsibility for Swiss premium taxes and the applicable law and jurisdiction. For Swiss insurance intermediaries operating cross-border into the UK, the BFSA introduces no changes, and they may continue to operate under existing law.

Investment services 

The UK and Switzerland mutually defer to domestic authorisation and supervision for cross-border financial investment services to professional investors and relieve service providers from authorisation requirements. The covered services include financial services such as transactions in financial instruments, portfolio management, investment advice, granting loans for transactions in financial instruments, securities trading, underwriting, and placing financial instruments.

Notably, for UK firms, the agreement removes the requirement for client advisers to register individually with a Swiss financial advisory register when providing services temporarily in Switzerland (cf. para. VIII.A.2.b of the Sectoral Annex Investment Services of Annex 5). This exemption applies to advisers serving institutional, professional, and also high-net-worth clients.

Under current Swiss law, foreign advisors are exempt from the Swiss registration obligation if they are prudentially supervised and exclusively serve institutional and professional clients such as financial institutions and large companies. However, this exemption does not extend to high-net-worth individuals who have opted to be treated as professional clients. The BFSA removes this restriction, allowing foreign advisors to approach Swiss high-net-worth individuals who have opted for professional client status without the need for registration – a significant relief for cross-border advisory services. However, also under the BFSA, UK firms must still ensure advisers meet Swiss conduct standards, have sufficient knowledge of the Swiss FinSA code of conduct, have professional insurance and are affiliated with an ombudsman according to Swiss standards (cf. para. VIII.A.2.c of the same Annex).

When approaching Swiss clients, UK advisors must provide a high-net-worth individual with a specific disclosure document confirming being established and supervised in the UK, not being subject to the obligation to entered into a Swiss client advisor register and indicating affiliation with a Swiss ombudsman (para. IX.B.2 of the same Annex).

As to Swiss firms providing services to the UK, they benefit from a new deference regime that allows them to provide investment services to UK high-net-worth individuals, professional clients, and eligible counterparties without UK authorisation. To use this regime, Swiss firms must register with the FCA and comply with disclosure, client verification, and reporting requirements. The regime also permits temporary in-person service provision in the UK, provided it does not constitute a permanent establishment. Under the BFSA, Swiss service providers which want to enter the UK market must register with FINMA through its Electronic Reporting Platform (EHP). FINMA then forwards the necessary information to the UK’s Financial Conduct Authority (FCA), enabling access to the UK market without requiring a separate, full application. Similarly, UK providers register with the FCA, which informs FINMA for Swiss market access. In both cases, regular reporting obligations apply.

FinTech, crypto and tokenization

Under the BFSA, digital-asset related activities may qualify as covered financial services if they fall under Annex 5, such as portfolio management, investment advice, or transaction execution involving tokenised securities for professional clients. Both Swiss and UK firms can provide these services cross-border under home-state authorisation, subject to Annex 5 requirements. Retail-facing crypto activities – such as trading platforms, standalone custody, or stablecoin issuance – remain outside the BFSA and require full host-state authorisation. Upcoming crypto regulations, e.g. the proposed new Swiss payment instrument institution license, which includes the issuance of stablecoins, and the crypto institution license, or the proposed new crypto-regulatory framework, are not expected to affect BFSA market access but will likely be addressed by the Joint Committee. The BFSA facilitates institutional crypto services.

Implementation challenges and legal considerations

While the BFSA marks a significant step forward in bilateral market access, its practical impact will depend on the resolution of several structural and legal constraints. Key considerations include:

Limited scope

The BFSA is limited to wholesale financial services and professional clients. While certain high-net-worth individuals may opt to be treated as professional clients, retail access remains governed by domestic legislation. Consequently, UK firms targeting Swiss retail clients must comply with FinSA requirements. In turn, Swiss firms must adhere to UK retail conduct standards under the FCA Handbook, including rules on disclosure and suitability (COBS). This segmentation limits cross-border retail innovation, particularly in digital finance and wealth management aimed at mass-affluent segments. It may be noted that the BFSA does not provide a standalone definition for retail clients but leaves this to the applicable host country.

Regulatory divergence risks

Mutual recognition depends on sustained compatibility in regulatory outcomes. As to ESG, both the UK and Switzerland are independently evolving their rules, while the Joint UK-Swiss Statement of 15 October 2024 affirms that alignment on sustainable finance standards is a priority area under the post-BFSA agenda and the Federal Council’s explanatory booklet of September 2024 explicitly recognizes the UK's leadership as a benchmark in the absence of immediate EU alignment. This is also true in areas like prudential capital or digital asset frameworks. Divergence in these domains could lead to misalignment over time. Without mechanisms for dynamic adjustment, divergence could impair market access or erode mutual trust. Enhancing technical coordination under the Joint Committee will be necessary to address this risk.

Supervisory coordination complexity

Operationalising mutual recognition goes beyond high-level legal commitments. It requires real-time coordination between supervisory bodies such as the FCA, PRA, and FINMA. This now includes the framework set out in the Memorandum of Understanding signed by FINMA on 22 September 2025, the FCA, and the PRA under the Berne Financial Services Agreement. The MoU specifies practical arrangements for cooperation and information exchange, covering insurance and investment services, notifications, registration processes, and intervention rights in the country of activity. It also establishes protocols for spontaneous and on-request sharing and of supervisory information to support market integrity and client protection. Joint supervision of cross-border financial groups, coordination on enforcement actions, collaboration on emerging risks (e.g. from AI driven financial services) and information-sharing regarding financial innovations or systemic risks remain critical.

Unclear dispute settlement provisions

Article 7 of the BFSA establishes consultation procedures via the Joint Committee but lacks binding dispute resolution provisions. No arbitral mechanism, escalation process, or remedial timeline is defined. In case of regulatory disagreements – e.g., on whether a new FINMA fintech license suffices for UK access – legal uncertainty may persist. Future annexes or protocols should consider formalising adjudicatory mechanisms to reduce interpretive risk and prevent politicisation of technical disputes.

Need for future protocols and dynamic alignment tools

To maintain regulatory convergence over time, further legal tools may be necessary. These could include interpretive protocols, expedited recognition pathways, or joint guidance on novel issues such as ESG data methodologies, AI supervision, or cross-border cloud infrastructure. The BFSA should thus be seen as a foundational, not exhaustive, instrument – subject to periodic legal refinement.

Overall, the BFSA introduces a new architecture for bilateral market access, based on legal recognition, regulatory cooperation, and strategic alignment. Its success will notably depend on continuous legal calibration and institutional engagement.

Contact us

For more information, please feel free to contact us. At Loyens & Loeff Switzerland, our dedicated financial regulatory and tax teams are uniquely positioned to help UK firms access the Swiss market and Swiss firms expand into the UK under the BFSA, ensuring full compliance and seamless cross-border operations.