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Shortly before 3 p.m. on Thursday at the ‘Bernerhof’, headquarters of the Ministry of Finance in Bern: Federal Councilor Karin Keller-Sutter and British Finance Minister Jeremy Hunt signed an agreement in which the two countries – depending on representation – “a good two ” or “three” years and is described by both parties as “unique” and “innovative”. A financial services agreement for banks and insurers, the “Berne Financial Services Agreement”.
In the future, providers from both countries should have free access to the other market if there are equivalent regulations – and the numerous restrictions in the agreement are respected. In certain areas, both countries accept the partner’s rules as equivalent. However, normal private customers have little benefit from the new contract; The agreement should ensure that financial service providers can more easily serve professional and large customers in other countries.
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This article was first published in the paid service of Handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
The treaty must now be ratified as quickly as possible. In Switzerland, the financial department wants to submit the matters to parliament by the middle of this year.
Federal Councilor Keller-Sutter is satisfied with the success of the negotiations. It was “a good day for the close relations between Switzerland and Great Britain,” she told media representatives after the signing. Chancellor Hunt sounded slightly more euphoric, pointing to a 130-year partnership between the two countries and calling it a “groundbreaking” and “ambitious” deal.
Private bankers have free access to Great Britain
The big winners of the agreement – from a Swiss perspective – are the asset management banks. While their British competitors already have fairly free access to Swiss customers, Swiss banks should now have this in Britain too.
UK customers with assets in excess of £2 million (approximately R2.2 million) will in future be able to be supported across borders without having to meet further requirements. The agreement therefore goes far beyond anything currently negotiated with other countries, such as Germany. A very attractive deal for the Swiss banks. You can now easily visit and advise your high net worth clients in London.
Little will change for British banks: they already have access to the Swiss market. The agreement only confirms this within the framework of an international treaty.
Swiss insurers face competition from England
The losers are the Swiss insurers. In the future you will face new competition from the island, without benefiting from any major relief in Britain itself. UK insurers will now have free access to Swiss customers in individual areas. Today, the Swiss insurance market is largely isolated.
The Swiss Insurance Association (SVV) is therefore not enthusiastic. In the insurance sector, there is an “asymmetrical negotiating outcome in favor of Great Britain”, according to a request from the SVV. There would be few benefits for Swiss insurers; overall, the net benefit would remain negative. “It is up to politicians to assess whether Switzerland should fundamentally buy market liberalization with asymmetric contracts.”
Media spokeswoman Sybille Zumstein reluctantly states that they will not oppose the agreement. Despite the reservations, the “overall economic benefits” of the agreement are recognized.
When asked, Keller-Sutter confirmed that there are people in the industry who are “skeptical.” There is no explicit guarantee of support for the agreement, the federal councilor says. You can also not worry about certain interests. The Federal Council wants to get this agreement through parliament because it makes the location more attractive. “This time the banks may benefit a little more, another time it could be the insurers,” says Keller-Sutter.
The Swiss negotiating delegation has probably taken a big step in accommodating the insurers during the negotiations: numerous areas are excluded from the contract. Not only are British insurers prohibited from operating where cantonal monopolies exist. Other highly regulated parts of the insurance business, such as life insurance, are also excluded from market access.
Little will change for small customers: the agreement only applies to large customers
In general, the agreement only applies to large customers. Banks are about institutional entrepreneurship and asset management with wealthy customers. When it comes to insurance, market access is limited to larger professional customers: that is, business customers with more than 250 employees, an annual turnover of 40 million francs or a balance sheet total of 20 million francs.
Offers for small customers are not part of the agreement. Swiss motor vehicles will no longer be able to be insured with British online providers in the future, and Swiss banks will not have easier access to the British retail sector. The resistance seems to be too great in these areas; there are no ambitions for early expansion.
Small customers were not part of the negotiating mandate from the beginning, Keller-Sutter says. The financial market’s interest in this segment was rather low. However, both parties are open to further expanding the agreement. One topic is of course sustainability in the financial world. It has already been agreed that the contract will be revised after five years.
Special arrangement for British estate agents
The treaty will only enter into force after ratification. However, one sector is already benefiting in advance: British insurance brokers. In fact, from 2024, when the new Insurance Supervision Act (VAG) comes into effect in Switzerland, foreign brokers will be required to establish an establishment. However, in exceptional cases this can be overridden. And because it would no longer apply once the agreement with Britain came into force, it should never come into force for British brokers now. This means that from January 2024, British brokers will also be able to acquire Swiss business clients.
Private bankers have free access to Great Britain
The big winners of the agreement – from a Swiss perspective – are the asset management banks. While their British competitors already have fairly free access to Swiss customers, Swiss banks should now have this in Britain too.
UK customers with assets in excess of £2 million (approximately R2.2 million) will in future be able to be supported across borders without having to meet further requirements. The agreement therefore goes far beyond anything currently negotiated with other countries, such as Germany. A very attractive deal for the Swiss banks. You can now easily visit and advise your high net worth clients in London.
Little will change for British banks: they already have access to the Swiss market. The agreement only confirms this within the framework of an international treaty.
Swiss insurers face competition from England
The losers are the Swiss insurers. In the future you will face new competition from the island, without benefiting from any major relief in Britain itself. UK insurers will now have free access to Swiss customers in individual areas. Today, the Swiss insurance market is largely isolated.
The Swiss Insurance Association (SVV) is therefore not enthusiastic. In the insurance sector, there is an “asymmetrical negotiating outcome in favor of Great Britain”, according to a request from the SVV. There would be few benefits for Swiss insurers; overall, the net benefit would remain negative. “It is up to politicians to assess whether Switzerland should fundamentally buy market liberalization with asymmetric contracts.”
Media spokeswoman Sybille Zumstein reluctantly states that they will not oppose the agreement. Despite the reservations, its “overall economic benefits” are recognized.
The Swiss negotiating delegation has probably taken a big step in accommodating the insurers during the negotiations: numerous areas are excluded from the contract. Not only are British insurers prohibited from operating where cantonal monopolies exist. Other highly regulated parts of the insurance business, such as life insurance, are also excluded from market access.
Little will change for small customers: the agreement only applies to large customers
In general, the agreement only applies to large customers. Banks are about institutional entrepreneurship and asset management with wealthy customers. When it comes to insurance, market access is limited to larger professional customers: that is, business customers with more than 250 employees, an annual turnover of 40 million francs or a balance sheet total of 20 million francs.
Offers for small customers are not part of the agreement. Swiss motor vehicles will no longer be able to be insured with British online providers in the future, and Swiss banks will not have easier access to the British retail sector. The resistance seems to be too great in these areas; there are no ambitions for early expansion.
Special arrangement for British estate agents
The treaty will only enter into force after ratification. However, one sector is already benefiting in advance: British insurance brokers. In fact, from 2024, when the new Insurance Supervision Act (VAG) comes into effect in Switzerland, foreign brokers will be required to establish an establishment. However, in exceptional cases this can be overridden. And because it would no longer apply once the agreement with Britain came into force, it should now never come into force again for British brokers. This means that from January 2024, British brokers will also be able to acquire Swiss business clients.
Source:Blick
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