SWX aims to merge to stay competitive

The SWX exchange in Zurich plans to stay among the leaders Keystone

The Swiss SWX stock exchange announced on Tuesday that it plans to merge with clearing and settlement groups SIS and Telekurs.

The move can be seen as a reaction to the increased competition among international financial markets and rapidly changing customer needs.

A statement from the SWX in Zurich said other considerations behind the decision to merge were increasing demands placed on technical infrastructure and the growing complexity of regulatory requirements.

It said no major job layoffs were foreseen as a result of the deal, which is expected to take effect in early 2008. No financial details were mentioned.

The three groups would create a structure resembling that of German stock exchange Deutsche Börse.

Merger pressure on European exchanges has intensified in recent years as competition increases and clients demand lower transaction costs, creating the need for economies of scale and diversified earnings.

“With this contemplated merger, we will be strengthening the Swiss financial centre by offering integrated infrastructure that spans the entire value chain,” said Peter Gomez, chairman of the SWX group and chairman-designate of the new company.

“Moreover, the open multi-provider architecture affords us unhindered access to all possibilities for international collaboration.”

One roof

The directors of the SWX, SIS and Telekurs believe that combining the strength of the three groups – which already work closely together – and organising them under one roof is the best possible approach for meeting future challenges.

The statement said the unified enterprise would foster close cooperation with international partners and continue to offer “open architecture” that enabled unhindered access to securities trading, clearing and settlement.

“Through this planned leveraging of strengths, the new company will be even more internationally anchored and thus able to position itself as a world leader also in the years ahead,” said Stephan Zimmermann, chairman of Telekurs.

The structure of the new organisation is to be developed over the coming months and an action plan drawn up for implementation.

When the plan is worked out in more detail, the merger proposal will be put for approval before the stakeholders of all three groups.

swissinfo with agencies

Key facts

Clearing: This represents a central setting-off of claims and liabilities.
Settlement: The term signifies the completion (booking) of securities transactions both on the securities and the money side.

SWX Group figures 2006

The Swiss exchange achieved record turnover and profit last year, according to figures announced the same day as the planned merger.

Net profit increased by 84% to SFr163.9 million ($134.53 million) on turnover of SFr423.6 million (+ 12% compared with 2005).

Profiles

All three groups are held and controlled by Swiss banks.

The SWX Group ranks among Europe’s leading providers of securities exchange services and offers its customers a comprehensive range of solutions for the domestic and cross-border trading of securities.

SIS Swiss Financial Services Group is a holding company that offers services to the securities industry.

The Telekurs Group is an internationally active service company primarily focused on card-based payment transactions, electronic payment systems and international financial information.