Chancellor Rishi Sunak will today start formal talks with his Swiss counterpart in a bid to broker a new post-Brexit financial services agreement for the UK.
The Treasury said the talks would see the two sides try to deliver “a comprehensive mutual recognition agreement that would reduce costs and barriers for UK firms accessing the Swiss market” and vice versa.
Talks are expected to cover a wide range of areas, including insurance, banking, asset management and capital markets.
The UK moved to bring back trading in Swiss shares earlier this month, after it was banned by the EU in 2019.
“The UK and Switzerland are both global financial centres, with a shared commitment to high standards of regulation, market integrity and investor protection,” Sunak said.
“Our ambition is to deliver one of the most comprehensive agreements of its kind in financial services as part of our plan to seize new opportunities in the global economy now we have left the EU.”
The EU banned trading in Swiss shares in 2019 over stalled trade negotations, with the UK forced to comply with the new rule.
The stance was estimated to have taken more than £1bn in trades away from the City of London each day.
A financial services agreement between the UK and Switzerland would open up other financial markets for cross-border trade.
It comes as the UK is also holding “memorandum of understanding” talks with the EU that will guide future regulatory cooperation on financial services.
Industry insiders close to the talks told City A.M. earlier this month that any agreement struck will only provide minimal access to EU markets at the absolute best and will more likely only set up a method for UK and EU regulators to swap information on decisions.
The UK’s financial services sector lost its pre-Brexit access to EU financial markets on 1 January, with firms now having to either set up bases in Europe or negotiate a patchwork of regulations from individual countries.
The only way the City of London can regain its pre-Brexit access to the EU is if Brussels grants regulatory equivalence across 40 areas, however Brussels believes the UK is destined to diverge from its financial services regulations and has withheld the designation.