What impact did Brexit have on the financial Industry in Switzerland?

Relations between Switzerland and the UK have been largely based on bilateral agreements between Switzerland and the EU. In general, this is also true of the financial sector. With Brexit, these agreements no longer apply to the UK. However, because Switzerland does not maintain a Financial Services Agreement with the EU, the direct impact of the Brexit to the Swiss financial market was not as significant compared to other sectors. To best ensure a smooth transition after the implementation of Brexit, the Swiss and UK financial market supervisory authorities took the necessary steps to preserve the existing reciprocal rights and obligations at supervisory authority level. Furthermore, Brexit led to a number of initiatives by the governments of the two countries trying to recalibrate the relationship also in the financial sector exploring new possibilities to intensify collaboration. In that spirit, the UK recognised the Swiss stock exchange regulation as equivalent and Switzerland deactivated the stock exchange protective measure in relation to the UK. In a broader context, Switzerland and the UK now envisage an agreement that should enable and facilitate cross-border market access for a wide range of financial services relating to insurance, banking, asset management and capital market infrastructure.

Have any new laws, regulations or judicial decisions greatly impacted your company’s business or your legal practice?

In the aftermath of the financial crisis, a large amount of new financial markets regulations has been enacted primarily to address systemic risks within the financial market. This had a large impact for the entire business, but also for legal practice. Lawmakers all over the world including Switzerland have introduced detailed prudential rules for Too Big to Fail Banks. On the other hand, a comprehensive regulatory package was adopted in all major jurisdictions around the globe with regard derivative trading. With the new legal framework, a duty to trade through central counterparties has been introduced accompanied with detailed margining and reporting requirements for counterparties. Furthermore, increasing restrictions and more detailed regulations on cross-border service provisioning especially within the EU make it much more complex to conduct a global wealth management business. Finally, it may be foreseen that digitisation and the use of data will cause the next wave of regulation, on one hand to capture the risks associated with these phenomena, but on the other hand be perhaps even more important to maintain a good environment for innovation within the jurisdiction. It seems that Switzerland, with its principles-based – and technology agnostic – regulatory framework is in any event very well-positioned for these new regulatory challenges.