Sunak Seeks Deeper U.K. Financial Services Ties With Switzerland

U.K. Chancellor of the Exchequer Rishi Sunak will hold talks with his Swiss counterpart on Wednesday as the two countries seek to deepen financial services ties in the wake of Brexit.

The virtual discussions with Federal Councilor Ueli Maurer will focus on the goal of “a comprehensive mutual recognition agreement” to cut costs and barriers for U.K. firms operating in Switzerland and vice versa, the Treasury said. The negotiations aim to cover sectors including insurance, banking, asset management and capital markets.

“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,” Sunak said in a statement. The two nations have a “shared commitment to high standards of regulation, market integrity and investor protection,” he said.

Sunak is trying to seize opportunities available since Britain completed its departure from the European Union at the end of last year. He has hinted at a repeat of Margaret Thatcher’s “Big Bang” period of financial services deregulation, and in November laid out a wider vision for the industry including a review of listing rules and a pledge to issue the country’s first green gilts in 2021.

Sunak Sees Big Bang 2 for U.K. Financial Services Industry

Sunak told the House of Commons on Tuesday that he hopes to provide an update when he announces the budget on March 3. “We are doing the technical work required to make sure that the launch of our green gilts are successful,” he said.

In November Sunak said he hoped the move would spur a wider market for corporate green bonds. His plans for financial services also include plans for mandatory disclosure by companies of their exposure to climate-change risks by 2025, measures to attract innovative businesses to Britain and a consultation on reforming the U.K.’s rules governing funds.

The Treasury said talks with Switzerland are set to continue “at official level over coming months.” But the U.K. is already strengthening its ties, and earlier this month, the Treasury said it plans to allowtrading in Swiss shares, reversing an EU ban.

Talks With Banks

Regulations aimed at granting share trading equivalence to Switzerland’s trading venues are due to enter force Feb. 3, subject to parliamentary approval. The Treasury said it expects the Swiss will reciprocate.

Even so, that’s unlikely to be enough to repair the damage wrought by Brexit. Before the EU ban, London-based trading of Swiss shares averaged 1.3 billion euros ($1.6 billion) per day, equivalent to about a fifth of the trading in EU shares that’s now been lost.

Also on Wednesday, Sunak is scheduled to hold talks with the heads of some of the biggest global banks, according to the Treasury, which didn’t detail the attendees. The chancellor intends to reiterate the government’s commitment to the U.K. financial services industry and express “confidence that Britain will remain one of the world’s pre-eminent financial centers” it said.

Another meeting is organized for next week between the chancellor and representatives from the insurance industry, asset managers and other firms.

— With assistance by Tom Metcalf

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