In a significant step toward deepening ties in the post-Brexit era, Switzerland and the United Kingdom have formalized their supervisory collaboration through a new Memorandum of Understanding (MoU). Signed on September 22, 2025, by the Swiss Financial Market Supervisory Authority (FINMA), the UK’s Financial Conduct Authority (FCA), and the Bank of England (BoE, including its Prudential Regulation Authority or PRA), this MoU operationalizes the Berne Financial Services Agreement (BFSA). Set to take effect when the BFSA enters force in early 2026, the agreement promises enhanced cross-border access in insurance and investment services, potentially boosting trade volumes, reducing barriers for firms, and strengthening investor protections. But what does this mean for financial markets, firms, and investors? This article explores the details, implications, and broader context of this landmark deal.
The BFSA, signed on December 21, 2023, between Switzerland and the UK, establishes mutual recognition in financial services, allowing firms from each country to offer certain services in the other without full local authorization. It’s a bespoke arrangement, distinct from the EU’s equivalence regime, focusing on insurance, investment services, and other sectors. The MoU builds on this foundation, detailing how supervisors will cooperate to ensure smooth implementation, market stability, and consumer safety. As two of Europe’s premier financial hubs—London and Zurich—the pact could facilitate billions in cross-border flows, especially amid global economic uncertainties.
The MoU at a Glance: Key Provisions and Scope
The 23-page MoU outlines arrangements for supervisory cooperation and information sharing under Article 14 of the BFSA, specifically in insurance (Annex 4) and investment services (Annex 5). It emphasizes mutual assistance while respecting domestic laws, with no legally binding obligations beyond facilitating the BFSA’s goals.
Core definitions include “Covered Financial Services Suppliers” (firms eligible for mutual recognition), “Covered Services” (e.g., insurance underwriting or investment advice), and “Covered Clients” (professional or institutional clients meeting criteria). Cooperation activities cover information exchange on request, unsolicited sharing of material events (like enforcement actions or financial instability risks), and technical discussions on regulatory issues.
Confidentiality is paramount: Non-Public Information must be protected, with onward sharing to third parties requiring consent, except for specified “Onward Sharing Bodies” like the Swiss National Bank or UK’s HM Treasury for financial stability purposes. Requests for assistance should be written, detailed, and addressed to designated contact points, with responses provided promptly unless conflicting with laws or public interest.
The MoU includes two annexes for sector-specific details:
Insurance Annex
- Supervisory Roles: UK authorities (home supervisors) oversee prudential aspects, while FINMA (host) handles interventions and non-deferred areas. Swiss law applies to certain intermediaries without deference.
- Notifications and Registers: Firms submit “section IV notices” for registration, with UK confirmation of eligibility. FINMA maintains a public register, updated electronically.
- Reporting and Disclosures: Annual reports from firms to FINMA (copied to UK), pre-contractual disclosures published by FINMA after consultation.
- Formal Dialogue: For issues like non-compliance or client harm, structured process with information sharing and resolution aims.
- Host Intervention: FINMA can impose restrictions after dialogue, notifying UK authorities; coordination for wind-downs if stability affected.
Investment Services Annex
- Supervisory Roles: FINMA (home) leads, with UK host intervention powers.
- Notifications and Registers: Similar to insurance, with FCA maintaining the register.
- Reporting: Annual firm reports to FCA (copied to FINMA).
- Pre-Contractual Disclosures: FCA publishes formats after consulting FINMA.
- Formal Dialogue and Interventions: Parallel processes to insurance, with direct requests if needed.
Amendments require written agreement, and termination is possible with 30 days’ notice, but ongoing matters continue.
Financial Implications: Opportunities and Risks
This MoU could unlock significant value for financial institutions. Swiss firms like UBS or Credit Suisse, and UK players like Aviva or Barclays, stand to expand services without duplicative regulation. In insurance, UK insurers can underwrite Swiss risks (e.g., property or liability) for professional clients, potentially adding €5-10 billion in annual premiums based on pre-Brexit flows. Investment services open doors for asset management and brokerage, targeting institutional clients like pension funds.
Market analysts project a 15-20% increase in cross-border activity by 2028, boosting London and Zurich’s competitiveness against EU hubs. Reduced compliance costs—estimated at 10-15% savings per firm—could lower fees for clients, enhancing competition. For investors, mutual recognition means better access to diversified products, with robust protections via information sharing.
However, risks linger. Geopolitical tensions or regulatory divergence could trigger interventions, disrupting operations. Confidentiality breaches or data protection issues (aligned with GDPR and Swiss equivalents) pose reputational threats. Firms must navigate “host intervention powers,” where supervisors can restrict activities if harm risks emerge.
Economically, the pact aligns with post-Brexit strategies: The UK gains a non-EU ally, while Switzerland reinforces its neutral, innovation-friendly stance. Amid global volatility—from energy crises to inflation—it promotes stability through dialogue, potentially influencing similar deals with other nations.
Broader Context: Building on Longstanding Ties
Switzerland and the UK have cooperated on financial supervision for decades, but Brexit necessitated a new framework. The BFSA and MoU fill the gap left by the UK’s EU exit, where Swiss firms lost passporting rights. This “enhanced equivalence” model goes beyond EU norms, emphasizing deference—trusting home supervision unless risks arise.
The timing is apt: Global financial flows hit $10 trillion in cross-border services in 2024, with insurance and investments growing 8% annually. The MoU enhances client protection, AML/CFT oversight, and market integrity, aligning with G20 standards.
For firms, preparation is key: Eligible suppliers must self-declare compliance, maintain buffers, and report annually. Supervisors commit to timely responses, fostering trust.
In summary, this MoU isn’t just regulatory fine-print—it’s a catalyst for deeper economic integration. As the BFSA activates in 2026, expect increased M&A, partnerships, and innovation in Anglo-Swiss finance. Investors should monitor firm expansions, but remember: regulatory harmony doesn’t eliminate market risks.
For the full details, see the official announcement here.
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