No sign of fall-out from EU spat, Swiss stock exchange chief says

The SIX stock exchange HQ in Zurich. © Keystone / Christian Beutler

One month after Brussels scrapped the equivalency that had allowed Swiss stocks to be traded in Europe, the fortunes of the SIX stock exchange are far from dented, its CEO says.

The loss of stock market equivalency on July 1 – a bargaining chip in the protracted political negotiations between Switzerland and the EU – was supposed to be a hardball signal to remind Bern of its reliance on European market access.

But one month after the fact, the figures are not showing signs of strain, says SIX CEO Jos Dijsselhof in an interview published this weekend in the NZZ am Sonntag.

In fact, he says, “July was an excellent month”, and despite the fact that the loss of equivalency remains “unsatisfactory”, trading volumes on the SIX exchange were up 26%.

This tallies with some other reports in the immediate aftermath of the market decoupling, with one economist saying that the EU may have misjudged the move, which “has harmed EU investors more than Swiss”.

Short-term effect?

Of course, the jump in activity was somewhat inevitable. Before July, Dijsselhof explains, 70% of Swiss stocks were handled in Zurich, while 30% were traded elsewhere; the jump in domestically-traded numbers may simply reflect the fact that Swiss stocks can no longer remain in European markets.

Whether this situation is sustainable in the longer-term is unclear, the banker says. In order to maintain the attractivity of Swiss stocks, “it’s important that they also be available for trading in other markets, including the EU”.

Failure to secure this may lead in the more distant future to Swiss companies moving to other markets, he admits, though “this has not been the case so far”.

In the interview, Dijsselhof, a Dutchman in the job since January 2018, also praised the swift response of the Swiss finance ministry, whose emergency action helped stem the fall-out from the loss of equivalency.

And despite the fact that the SIX Group now has a European monopoly as the Swiss share trading venue, it has no intention of raising its fees – “that would be a very bad signal to send to our clients”, Dijsselhof says.