DThe Swiss stock exchange SIX threatens to lose market access to the European Union (EU) in July. Also on Tuesday, the European Commission did not take the decision to further classify SIX as equivalent to stock exchanges in the EU. Maros Sefcovic, Vice President of the European Commission, said during a press conference after the Commission discussed EU relations with Switzerland.
This reports the "Neue Züricher Zeitung" on their website. In general, the meeting of Tuesday was described as the last time to take the necessary decision. In principle, the Commission could grant an extension to SIX and other local trading venues until Friday. This is unlikely, it was said by the EU.
A withdrawal of recognition would deprive SIX of a significant part of the business. Investors from Paris or Frankfurt could no longer buy any shares on the Swiss stock exchange. Since buying in Switzerland is generally cheaper, this would initially affect mainly market participants in the EU. But even Swiss companies, which are in the eyes of international investors, would have an interest that their shares can also be easily traded by foreigners in Switzerland.
In order to protect the fourth largest stock exchange in Europe, Switzerland has presented an emergency plan. This provides that the government with the help of emergency rights prohibits EU stock exchanges to trade Swiss stocks. If the foreign trading venues stick to it, the SIX is likely to attract even more volume, at least temporarily. Around 30 percent of the volume of Swiss equities is currently being traded on other platforms such as CBOE Europe, Turquoise or Aquis.
For around five years, Switzerland and the EU have been negotiating the so-called Framework Agreement, which is intended to establish future adjustments to existing market access agreements and dispute resolution mechanisms. Although the EU has come to terms with Switzerland in many ways, there is still a lot of skepticism there. Switzerland is demanding improvements, in particular with regard to wage and employee protection and state aid. Switzerland had recently rejected parts of the intended agreement as insufficient and demanded further talks.
. (tagsToTranslate) Maros Sefcovic (t) European Union (t) EU (t) European Commission (t) Exchange (s) Switzerland