Switzerland and the United Kingdom have concluded the Berne Financial Services Agreement (BFSA), a binding agreement under international law on mutual recognition in selected areas of financial services. The agreement was signed on December 21, 2023, the Federal Council adopted the dispatch to Parliament on September 4, 2024, and on the British side, implementation was decided in 2025 by means of the Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025.
From an expected date of January 1, 2026, a specialized market access regime for Swiss financial institutions will be created, which will provide a more stable and predictable basis, in particular, for the cross-border distribution of financial services and delegation and asset management structures in the wholesale sector between Switzerland and the United Kingdom.
For fund management companies, managers of collective assets and asset managers, the BFSA offers the possibility of providing services to professional and certain wealthy clients in Great Britain from Switzerland in a more structured manner, without having to apply for a full British license, provided that the requirements of the new regime and registration with the Financial Conduct Authority (FCA) are met.
Velaw AG supports its clients with the legal and strategic classification of the agreement, with the structuring and adaptation of fund and mandate structures with UK relevance, and with the preparation of the necessary regulatory steps.
On December 21, 2023, Switzerland and the United Kingdom signed an agreement in Bern on mutual recognition in the areas of banking, investment services, asset management, insurance and other segments of the financial market. The agreement is officially referred to as the Berne Financial Services Agreement and is intended to strengthen the competitiveness of the two financial centers and institutionally secure close cooperation.
On the Swiss side, the Federal Council adopted the dispatch on the approval of the agreement on September 4, 2024. The agreement has since been approved by the parliaments of both countries and is expected to enter into force at the beginning of 2026 after the completion of the national procedures.
In the United Kingdom, the BFSA was implemented by the Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025. This regulation enshrines the new regime in British law and, in particular, provides for the possibility that eligible Swiss institutions can provide cross-border investment services to British clients without requiring a full UK authorization, provided that they are entered in the FCA's register provided for this purpose.
The BFSA is based on an approach of results-oriented mutual recognition. The parties recognize the supervisory and regulatory frameworks of the other side in certain sectors as equivalent and undertake to remove obstacles to the cross-border provision of financial services as far as possible in the wholesale sector.
The scope of the agreement includes, in particular, banking, investment services, asset management, insurance, financial market infrastructures and certain derivatives markets. The focus is on services for professional and institutional clients as well as for clearly defined groups of wealthy and "sophisticated" private clients. The retail business remains expressly reserved for national law and is not liberalized by the BFSA.
On the British side, the agreement obliges the authorities, among other things, to maintain a register for Swiss institutions that fall under the BFSA regime and to grant these institutions market access in accordance with mutual recognition. In return, primary prudential supervision remains with the home authorities, namely FINMA.
For Swiss fund management companies and managers of collective assets, the agreement creates legal certainty in particular in two areas that are already practically relevant today.
Firstly, market access for investment services to professional and wealthy clients in the United Kingdom is placed on a clearly defined basis. Swiss institutions can provide portfolio management, advisory and other investment services from Switzerland, provided that they meet the requirements set out in the British implementing provisions and comply with the codes of conduct and information requirements set out therein.
Secondly, delegation and outsourcing structures in asset management are explicitly addressed. The agreement ensures that existing and future models in which British funds delegate portfolio management to Swiss asset managers or in which Swiss institutions take over mandates within the framework of cross-border delegation chains remain permissible in principle and are not to be undermined by a unilateral tightening of national third-country law.
Switzerland and the United Kingdom already have largely open regimes for the distribution of funds to professional and high-net-worth investors. The BFSA stabilizes this openness and reduces the risk of market access deteriorating abruptly due to political or regulatory developments. This gives the medium- and long-term planning of fund and product strategies with a UK focus a more reliable basis.
For Swiss fund providers and asset managers, the question arises with regard to the entry into force of the agreement in which areas the new regime is to be used in a targeted manner. The following considerations are particularly appropriate:
First of all, it must be examined which services are to be provided cross-border in the United Kingdom in the future and which customer segments are to be addressed. In a second step, it must be clarified which fund vehicles – such as Swiss funds, Luxembourg structures such as RAIF or SIF or SCSp or other AIF – are to be used for the UK wholesale market and how these products can be integrated into the future distribution and delegation architecture.
At the same time, it is advisable to address the British implementation provisions at an early stage, in particular the requirements for entry in the FCA register, the applicable codes of conduct and any reporting and documentation obligations. As a rule, this will require adjustments to internal directives, contracts, customer information and, where applicable, the organizational documentation.
Velaw AG supports its clients as a specialized legal boutique for financial market and fund law in the practical implementation of the new market access between Switzerland and the United Kingdom.
We translate the BFSA directly into implementable business models, from the strategic classification of your UK ambitions to the smart structuring of fund and mandate solutions with UK relevance, to the targeted preparation of FCA registration and all necessary contractual and organizational adjustments.
Our aim is to make the opportunities of the British wholesale market specifically usable, to specifically reduce market entry barriers and to clearly control regulatory risks instead of just managing them.
