The Berne Financial Services Agreement (BFSA) Between Switzerland And The UK

Key Take-aways

1. The BFSA will go live in January 2026, defining areas of financial and insurance services regulation as well as areas of banking, asset management and financial market infrastructure regulation that are mutually recognised as equivalent.
2. For FINMA regulated Swiss financial services providers, the BFSA will allow a cross-border access to UK high net-worth clients without additional UK licenses, but by registering with the FCA through their FINMA communication channel.
3. For UK non-life insurers, it will be possible to access the Swiss market of professional policyholders without a FINMA license. UK insurance brokers will be exempted from a Swiss local presence requirement.

1. Introduction

On 21 December 2023, after a negotiation process lasting for more than two years, Switzerland and the UK signed the Berne Financial Services Agreement (BFSA). The BFSA is a bilateral treaty, by which the UK and Switzerland recognise each other's national laws and regulations as achieving an equivalent outcome in the sectors covered by the agreement.

The BFSA constitutes a key step in the post-Brexit relationship between Switzerland and the UK, as far as financial services and insurance services provided on a cross-border basis from one jurisdiction to the other are concerned. The Swiss Federal Council published the report (Botschaft) regarding the adoption of the BFSA in September 2024 and the treaty was ratified by the Swiss Parliament in March 2025. The Swiss and UK regulators having agreed a Memorandum of Understanding on 22 September 2025 and having provided their Implementation Guidelines in November 2025, the BFSA is now ready for the go-live in January 2026.

The innovative structure of the BFSA with a main body, combined with sector-specific annexes (the Annexes) that can be expanded or removed, depending on the further development of the national law, should allow a long-lasting impact of the treaty. At present, it covers the following sectors:

1. Annex 1: asset management activities in the sense of (a) marketing activities for collective investment schemes and (b) portfolio management
2. Annex 2: banking services in the sense of deposit taking and lending, excluding consumer credit business
3. Annex 3: financial market infrastructures, including (a) central counterparties, (b) over-the-counter (OTC) derivatives and (c) trading venues
4. Annex 4: insurance services (non-life) and insurance intermediation
5. Annex 5: financial services (in the sense of MiFID business)

In two areas, the BFSA will improve the cross-border market access by allowing market access to the other jurisdiction on the basis of the principle of deference, without interfering with national laws. On the one hand, this is regarding financial services, both for the access to the UK and to Switzerland. On the other hand, the BFSA will allow market access for providing non-life insurance with professional policyholders from the UK to Switzerland and it will exempt UK insurance brokers from Swiss domiciliation requirements. For Swiss insurers writing insurance policies with UK policyholders, the BFSA will not change current practices.

2. Impact for Financial Services provided from Switzerland to the UK

2.1 Scope of deference to the regulation by FINMA

Swiss financial services providers who may benefit from a deference by the UK to the Swiss regulation of financial services and the supervision by FINMA must be licensed by FINMA (a) as banks under the Swiss Banking Act or (b) as securities firms, fund management companies, asset managers of collective assets or portfolio managers under the Swiss Financial Institutions Act (FinIA). In order to provide financial services to UK clients under the scope of the BFSA, the Swiss firm must be permitted to do so under its internal regulations (articles of association, organisational regulations), it must be duly authorised for such activity by FINMA under its regulatory status in Switzerland and it must actually provide such services in Switzerland.

Holders of a fintech license under the Swiss Banking Act, FINMA regulated trustees and financial intermediaries in the sense of the Swiss AML legislation without FINMA license are not eligible for the BFSA regime. Also, FINMA regulated Swiss branch offices of non-Swiss financial services providers active in the Swiss market may, regardless of the regulatory status of the head office, not opt into the BFSA regime for their cross-border activities in the UK.

Swiss firms in scope of the BFSA will be permitted to provide investment services and activities in the sense of UK MiFID (including, for instance, execution of orders on behalf of clients, receipt and transmission of orders regarding financial instruments, market making, portfolio management and investment advice) and certain ancillary services (including, for instance, custody of securities or FX execution services) regarding financial instruments (including transferable securities, money market instruments, collective investment schemes, alternative investment funds and derivatives transactions) to UK clients on a cross-border basis without further local authorisation or registration requirements, provided that the clients are per se professional clients, eligible counterparties in the sense of UK MiFID or high net worth clients with net assets in excess of GBP 2 million (including private investment structures for such clients).

To the extent that the Swiss financial services provider does not yet have the information about the net assets of the high net worth clients, the communications with the relevant individual, its representative or the representative of the private investment structure in order to determine the status of the UK client is also a permitted activity under the BFSA. As regards the calculation of the net assets to meet the minimum funds requirement of GBP 2 million, this will be made pursuant to the principles of UK law.

The regime of the BFSA will not allow an activity in the UK that results in a permanent establishment. Also to the extent a Swiss firm has a branch office in the UK, it may not provide the same services it is already licensed for through the branch under the BFSA.

2.2 Notification and disclosure obligations

Any Swiss financial services provider intending to benefit from the regime of the BFSA must notify the FCA through the communication channel of FINMA (including, inter alia, the covered services the service provider intends to supply and the categories of covered clients).

Upon being notified, FINMA conducts a "properness" review of the information provided and issues a "good standing letter" that may be made available to the FCA. FINMA will take 60 days for its review and then inform the FCA, which takes another 30 days in order to complete the process. A firm will have to be included in the public register of the FCA prior to starting the cross-border activities. Any relevant changes (e.g. new activities) will have to be notified and the activities cannot commence before the public register is updated.

As regards the annual disclosure obligations to the regulator under the BFSA, a firm must make these disclosures to FINMA by 30 April for the previous calendar year and FINMA provides the information to the FCA without a further review.

3. Impact for Financial Services provided from the UK to Switzerland

Regulated UK financial services providers already benefit today from an access to the Swiss market without further licensing requirements for financial services provided on a cross-border basis without a Swiss presence.

The BFSA grants reciprocity as regards the absence of any registration requirements under the Financial Services Act (FinSA) for UK financial services providers servicing Swiss clients with net assets in excess of CHF 2 million. However, the UK financial services providers will not be relieved from ensuring that the client advisors have sufficient knowledge of the FinSA obligations, from setting up a professional indemnity insurance coverage and from the affiliation with the FinSA ombudsman services, where applicable.

FINMA does not need to be notified before a UK firm starts to provide services to Swiss clients under the scope of the BFSA. However, UK financial services providers must use a disclosure document to be made available to clients in writing or text form, stating (a) that the UK firm is established and duly regulated in the UK, (b) that the duty to register its client advisors in a client advisors registry does not apply and (c) the Swiss ombudsman where it is affiliated.

4. Impact for Insurance Services and Insurance Intermediation Services from the UK to Switzerland

4.1 Scope of deference to the UK for Insurance Services

The BFSA exempts regulated UK non-life direct insurers from obtaining a FINMA license and establishing a Swiss branch office when providing non-life policies under exclusion of accident and health insurance, motor third party liability and any type of insurance benefiting from a monopoly position (e.g. the mandatory building insurance) to Swiss corporate clients that exceed two of the following three thresholds: turnover of more than CHF 40 million; balance sheet total of more than CHF 20 million; and more than 250 employees.

Prior to making use of the BFSA regime, a UK insurer must be placed on the relevant FINMA register of UK insurers in scope of the regime. For these purposes, the UK insurer must notify the UK authorities, who will coordinate the registration with FINMA.

4.2 Notification and disclosure obligations

UK insurers must, in addition to any mandatory disclosure obligations under the Swiss Insurance Contract Act, disclose certain minimum information specified in the BFSA to clients prior to entering into a contract, including: (a) that the insurer is supervised in the UK and not by FINMA, (b) that the policyholders is personally liable for taxes levied on premiums in Switzerland, (c) contact details of the UK insurer for obtaining information on the knowledge and experience of employees involved in the distribution process, on addressing complaints regarding professional negligence and on addressing errors or inaccurate information regarding the distribution activities and (d) the governing law and place of jurisdiction.

4.3 Impact for UK insurance intermediaries

The BFSA will only apply to firms engaged in untied insurance intermediation (brokers) as opposed to tied insurance intermediation (agents) and exempt UK insurance brokers from the domiciliation requirement in Switzerland when providing intermediation services to Swiss clients. All other obligations otherwise applicable to untied insurance intermediaries (e.g. education and training of persons involved in the intermediation) will continue to apply. The BFSA will, in addition, require that the UK brokers inform clients (a) that they are personally liable for taxes levied on premiums in Switzerland and (b) about the governing law and place of jurisdiction for disputes.

5. Impact for Central Counterparties

Central counterparties duly established in the UK will be deemed to be regulated under an equivalent regulatory framework. This will simplify the process of obtaining an authorisation by FINMA under the Swiss Financial Market Infrastructure Act (FinMIA) before granting access to their services for Swiss participants.

6. Impact for trading venues

The BFSA will provide that the rules for the supervision of trading venues (i.e. a regulated market or a multilateral trading facility) are deemed to be equivalent in Switzerland and the UK, however, without relieving the trading venues from obtaining relevant authorisations before onboarding participants in the other jurisdiction.

7. Impact for OTC derivatives regulation

The BFSA will provide that the risk mitigation obligations of article 107 to 110 FinMIA applicable to Swiss counterparties trading over the counter (OTC) derivatives transactions with UK counterparties may be satisfied by complying with the respective UK rules, which are recognized as equivalent for purposes of the FinMIA. However, this recognition is already in place at present. Conversely, the BFSA will provide that the risk mitigation obligations applicable to UK counterparties trading OTC derivatives transactions with Swiss counterparties may be satisfied by complying with the relevant Swiss rules, which will be recognized as equivalent for purposes of the UK rules, except for the standards and supervision of initial margin models and the variation margin obligations applicable to physically settled FX forwards and swaps.

8. Impact for banking and asset management services

As regards the Annexes applicable to banking services (deposit taking activities and lending) as well as to certain asset management activities (marketing of alternative investment funds (AIFs) and collective investment schemes and acting as asset manager for AIFs, collective investment schemes, pension funds or insurance companies), the BFSA establishes that the Swiss and UK rules are deemed to be equivalent also in these areas. However, the BFSA will not change the current cross-border practices between Switzerland and the UK for these sectors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.