Draft Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025
(1 day, 18 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That the Committee has considered the draft Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025.
It is a pleasure to serve under your chairmanship, Mr Mundell.
The regulations will implement commitments made by the UK under the Berne financial services agreement of 2023, and will strengthen our economic relationship with Switzerland, one of the world’s leading financial centres. In short, they will provide greater certainty and flexibility for UK businesses, helping to ease cross-border trade in financial services and boosting growth. Importantly, they will maintain and enhance robust oversight and protection for UK consumers. I am pleased that the regulations have been welcomed across industry, including by TheCityUK, and I pay tribute to the previous Government for their work on the agreement during their time in office.
There are three key elements to the legislation, which establishes a new framework for market access, regulatory co-operation and safeguard powers for UK regulators. First, the regulations will remove duplicative and burdensome requirements for UK firms, making cross-border financial services trade with Switzerland easier, more stable and more predictable. The new framework will allow Swiss investment service firms to supply certain cross-border services directly to UK clients, including sophisticated and high net worth individuals, without the need for UK authorisation. In return, British businesses, especially insurers, will be able to provide certain services directly to Swiss clients without the need for Swiss authorisation. Importantly, insurance brokers will also be exempt from Swiss localisation rules.
Secondly, the legislation will protect consumers, market integrity and financial stability by ensuring that the new access arrangements are safe and well managed. New powers and duties will be granted to the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England. Thirdly, the regulations will establish enhanced co-operation arrangements between UK and Swiss regulators, which will be supported by a formal memorandum of understanding, signed on 22 September. This will support information sharing and effective dispute resolution and will facilitate the authorities’ relevant functions for the purposes of ensuring financial stability, market integrity and the protection of investors and consumers. The FCA and the Bank, as well as the PRA, will also work closely with their Swiss counterparts in FINMA to address any risks or issues that may emerge.
Should the Committee support the legislation today, as I hope it does, the agreement will enter into force in January 2026. I commend the regulations to the Committee.
Mark Garnier (Wyre Forest) (Con)
I will not keep the Committee for too long. I thank the Minister for her kind words about the work of the previous Government in this area. As she rightly said, the regulations originate from the Berne financial services agreement, signed back in 2023, so it is something we have worked on. As somebody who worked in financial services for 27 years before coming to Parliament—I worked for two Swiss banks, had clients in Switzerland and did this kind of cross-border business—I can attest that this is a fantastic opportunity for our financial services sector. Anything that formalises the arrangement and makes transactions less sticky and easier to do can only be a good thing, so we will certainly be supporting the proposal 100% this evening. I thank the Minister for her excellent speech and her kind words about the work of the previous Government—I think she forgot to add “Strong and stable for 14 years”, but still.
Question put and agreed to.