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Swiss threaten to freeze out EU stock exchanges

SIX group
SIX group, which operates the Swiss stock exchange, was also annoyed by the EU one-year equivalence restriction. Keystone

Switzerland has threatened tit-for-tat measures if the European Union refuses to allow the Swiss stock exchange to fully operate in the EU market on a permanent basis. EU exchanges would be hit with similar restrictions by Switzerland, warned Swiss Finance Minister Ueli Maurer.

In December the EU only granted the Swiss stock exchange, operated by the SIX groupExternal link, permission to trade EU company shares for one year. The decision infuriated Swiss politicians who accused the EU of acting in bad faith and threatening Switzerland’s financial interests.

On Friday, Maurer unveiled plans to give EU trading venues a dose of the same medicine if SIX is not granted further financial “equivalency” by the end of this year. Switzerland would enact new regulations that would require all foreign exchanges to apply for permission to trade Swiss shares.

If the EU continues to be obstinate in its refusal to grant SIX long-term access to its market then “EU trading venues would not receive this recognition,” read a government statementExternal link.

But this would not prevent EU banks and securities dealers from continuing to trade Swiss shares on the Swiss stock exchange. The proposed ordinance would come into force by December 1 at the latest, the statement read.

However, Maurer told reporters that Switzerland would continue to prioritise plan A – getting permanent full access for SIX in the EU. “The Federal Council attaches particular importance to emphasising that the measure serves solely to protect the functioning of Swiss stock exchanges if need be. It is continuing its efforts to consolidate and deepen relations with the EU. Its aim is still to make progress on the institutional framework agreement,” said the government statement.

Switzerland’s relationship with the EU has soured in recent years, particularly on the topic of immigration. The EU has also toughened its stance on non-member states after Britain voted to leave the single market.

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