The UK government has introduced regulations implementing the 2023 UK-Swiss Berne Financial Services Agreement into UK domestic law with effect from 1 January 2026. The regulations create a new regime allowing Swiss firms to provide cross-border investment services in the UK and recognise the equivalence of the Swiss regimes regulating risk mitigation for over-the-counter (OTC) derivatives and regulating central counterparties (CCPs).

The UK and Switzerland plan to fully implement the Agreement by end-2025 so that firms can start registering to use the agreement on 1 January 2026.

New regime for Swiss firms providing cross-border investment services in the UK

The Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025 (here) are made using new powers in the 2023 Act allowing HM Treasury to make regulations to implement mutual recognition agreements. The regulations are subject to the approval of each House of Parliament.

The regulations ensure that eligible Swiss authorised firms registered with the FCA can provide cross-border 'MiFID' investment and ancillary services to UK high-net worth individuals and private investment structures (with assets exceeding £2 million), as well as 'per se' professional clients and eligible counterparties, without the need for authorisation in the UK. Accordingly, the regulations:

• add a new exclusion to the regulated activities order (RAO) made under the Financial Services and Markets Act 2000 (FSMA 2000) covering activities of a registered Swiss firm carried on from Switzerland to the extent that it is providing services covered by its registration with the FCA to clients and in relation to financial instruments specified in its registration; and
• add a new exemption to the financial promotion order made under FSMA 2000 covering communications by a registered Swiss firm in relation to registered services, where made to clients and in relation to financial instruments specified in its registration.

Registered Swiss firms will not be able to rely on the existing 'overseas persons exclusion' in the RAO to the extent that their services are covered by the new exclusion but may be able to 'mix and match' by only registering services not covered by the existing exclusion. Swiss firms that are authorised in the UK because they have a branch here will not be able to rely on the new regime to the extent that the services are covered by their existing permissions but may be able to vary those permissions to allow them to do so. The regulations do not specifically address the provisions of the Agreement covering services provided during temporary visits to the UK by employees of registered Swiss firms.

Under the Agreement, registered Swiss firms must comply with pre-contractual disclosure, client verification, client consent and supervisory reporting requirements and requirements regarding the use of third-country sub-custodians (the FCA is to specify the wording of the pre-contractual disclosures and when and how these are provided). The regulations give the FCA powers to impose prohibitions and restrictions on registered Swiss firms which fail to comply with these requirements or whose activities are likely to cause material harm to clients or the UK financial system, subject to prior regulatory dialogue with the Swiss regulator, FINMA, except in urgent cases.

The regulations allow the FCA to extend its product intervention rules to registered Swiss firms. They also give the FCA and the PRA powers to require registered Swiss firms to provide information and to impose prohibitions or restrictions on registered Swiss firms under a general prudential safeguard. They create a wind-down regime for Swiss firms that are subject to FCA prohibitions or restrictions or cease to be registered with the FCA (or if the Agreement is terminated).

In addition, registered Swiss firms relying on the new regime may have to comply with other generally applicable UK requirements, such as the national private placement for alternative investment funds, the onshored rules on investment research and the disclosure and consent requirements relating to rights of reuse under financial collateral arrangements.

Recognition of equivalence of Swiss risk mitigation rules and CCP regulation

The OTC Derivatives Risk Mitigation and Central Counterparties (Equivalence) (Switzerland) Regulations 2025 (here) are made using existing powers in the onshored UK European Market Infrastructure Regulation (EMIR).

These regulations include a determination that Swiss legal, supervisory and enforcement arrangements are equivalent to both margin and other risk mitigation rules under UK EMIR, so that UK counterparties entering into OTC derivatives with Swiss counterparties can comply with the Swiss rules instead of the corresponding UK rules (but only if both counterparties are subject to the relevant Swiss rules). The UK counterparty must also still comply with UK initial margin model requirements and, if the OTC derivative is a physically-settled foreign exchange swap or forward and either counterparty is a bank, UK variation margin requirements.

This equivalence determination will end, from 1 May 2026, the UK temporary intragroup exemption regime (TIGER) from margin requirements for OTC derivatives transactions between UK counterparties and their Swiss affiliates (and UK counterparties will instead have to rely on the intragroup exemption in UK EMIR for those transactions). TIGER provides exemptions from margin requirements under UK EMIR for certain transactions in OTC derivatives between UK counterparties and their overseas affiliates until 31 December 2026 but only where there is no equivalence determination in relation to the margin rules of the relevant overseas jurisdiction. The UK and Switzerland have indicated that they intend to discuss enhancing their cooperation in relation to the application of OTC derivatives intragroup exemptions.

These regulations also include a determination that Swiss legal and supervisory arrangements ensure that Swiss-authorised CCPs comply with legally binding requirements equivalent to the requirements laid down in UK EMIR for UK CCPs.

The Swiss CCP, SIX x-clear, currently benefits from the UK temporary recognition regime for non-UK CCPs. The equivalence determination paves the way for the Bank of England to grant full recognition to SIX x-clear similar to that already granted to CCPs from other countries, subject to fulfilment of the other conditions to recognition.

FCA implementation of the Agreement

The FCA has invited eligible Swiss investment firms to indicate their interest in making use of the new regime. It has also invited UK insurers to indicate their interest in making use of the new regime under the Agreement for UK insurers to provide cross-border services into Switzerland.

The FCA expects to conclude a memorandum of understanding with FINMA on supervisory cooperation and to consult on rule changes implementing the Agreement in September. The regulators are to publish detailed operational guidance in October.

Following ratification by the UK and Switzerland, the Agreement will enter into force and firms may formally apply for registration from 1 January 2026.

 For more information on the Agreement, see our previous blogpost, UK and Switzerland agree on mutual recognition of financial services (January 2024, here) and the report prepared by the City of London and Clifford Chance, The Berne Financial Services Agreement: Explaining the UK-Switzerland Agreement on Mutual Recognition in Financial Services (March 2024, here).

Authors: Caroline Dawson and Chris Bates