Swiss End EU Stock Market Restrictions as Relations Improve

(Bloomberg) — Switzerland will remove the European Union from its stock market protection list, ending a restriction on the trading of Swiss shares in the bloc that had been imposed in 2019.

The measure was introduced after the EU refused to continue to grant equivalence to Swiss stock exchange regulations. 

From May, European venues will again be able to start trading and list Swiss shares, and dual listings of Swiss companies will be possible. Due to the absence of EU equivalence recognition however, European securities firms are not allowed to trade European stocks on the Swiss exchange.

The decision comes after the bloc removed its own restrictions on firms trading in Swiss equities last year, according to a government statement Wednesday. Switzerland and the bloc also agreed last month on a new deal to ensure the country’s access to the European single market, a key moment in the rebuilding of ties between the two sides.

Switzerland’s measure redirected trading back to the country by prohibiting Swiss shares from being traded in the EU. 

“An overall assessment showed that the Swiss protective measure with respect to the EU is now no longer necessary,” the government said. It also said the measure could have repercussions for Swiss companies in some cases, citing as an example mergers with EU firms.

According to the government’s statement, it will continue to seek recognition of equivalence and improved EU market access for Swiss financial service providers. 

“The re-recognition of stock exchange equivalence by the EU would be the logical consequence of the rapprochement between Switzerland and the EU on open political issues,” a spokesperson at the Swiss Stock Exchange said.

The SIX Swiss Exchange is the third biggest in Europe.

(Updates with details of trading restrictions throughout story. An earlier version corrected the size and scope on Swiss stock exchange.)

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