BFSA: a novel agreement with a big impact

The BFSA was signed by Switzerland and the United Kingdom on 21 December 2023 and comes into force on 1 January 2026. It creates a novel form of mutual market access for wealth management, securities services, insurance, asset management and financial market infrastructures based on mutual, results-oriented recognition of each party’s legal and supervisory framework.

New opportunities for financial service providers in Switzerland  

Specifically, it allows financial service providers in Switzerland to offer cross-border securities services to professional and high-net-worth clients with assets of more than GBP 2 million in the UK. These services will no longer require additional authorisation by the British authorities, thus reducing administrative hurdles and facilitating market entry. The move gives Swiss banks a strategic advantage over their competitors, who will still have to go through complex licensing processes. It also introduces a new balance into the bilateral relationship. British banks are already largely able to conduct cross-border business in Switzerland, but the BFSA opens up similar access for their Swiss counterparts in the UK too. 

The main beneficiaries of the new, streamlined system in Switzerland will be banks, securities firms, managers of collective assets, fund management companies and asset managers – all of them areas where cross-border access to the UK market is especially important. However, the agreement is also of great significance for the Swiss financial centre as a whole: around 45.5% of assets under management in Switzerland – some CHF 4,200 billion – belong to foreign clients. In addition to the EU, a substantial proportion of these originate from the UK. The BFSA therefore helps to secure and enhance the financial centre’s international competitiveness, and bolster domestic value added, tax revenues and jobs.

A framework with potential for development 

Over and above the immediate easing of market access, the BFSA has a clear strategic dimension. It has been deliberately designed so that it can be updated and upgraded pragmatically. The two contracting parties have created transparent procedures to enable this. This means that there is a realistic prospect of further sectors – such as digital financial services and new market infrastructures – being brought within the scope of the agreement. The BFSA also paves the way for closer collaboration on central financial centre issues such as sustainable finance and technological innovations. This is complemented by enhanced regulatory and supervisory cooperation, which safeguards system stability, integrity and client protection. 

Understand requirements and exploit opportunities 

The agreement gives rise to specific requirements for Swiss banks. Facilitated market access does not obviate the need to implement regulations diligently. That includes timely registration in the UK, adjustments to internal processes and compliance with specific reporting and disclosure obligations. Organising the cross-border business correctly also remains key.  

The BFSA is a framework that charts a course beyond bilateral exchange and sends a signal internationally. It demonstrates that when it comes to market access, there is a place for robust and practical solutions that transcend conventional approaches, provided the parties’ legal and supervisory frameworks are sufficiently compatible. To that extent, the BFSA is also a forward-looking blueprint for further bilateral agreements between Switzerland and other interested countries.