EU to limit Swiss stock exchange market access

The Swiss stock exchange has no long-term certainty in the EU Keystone

Switzerland and the European Union look set for another row as the EU confirmed it would slap a one year limit on Swiss stock exchange access to its markets. European Commission vice-president Valdis Dombrovskis said 27 member states had agreed to the condition, but the decision has not yet been formally announced.

Swiss-EU relations have been strained in recent years by migration and corporate tax disputes, which have bogged down negotiations on how the bilateral relationship will move forwards in future. This includes EU market access – or financial equivalence – for Swiss finance players in the wake of EU regulatory reforms.

Swiss public television SRF and the Swiss news agency both reported on Thursday evening that the EU looks set to signal its discontent by limiting financial equivalence to the Swiss stock exchange for a year.

“We are indeed proposing to recognise equivalence for a limited period of time, until the end of 2018. It can be extended if there is sufficient progress in creating an institutional framework agreement between the EU and Switzerland,” Dombrovskis told SRF.

André Simonazzi, spokesman for the Swiss governing Federal Council, repeated earlier comments that Switzerland could now reconsider a pledge to stump up a CHF1.3 billion cohesion fund payment for improving living standards in poorer EU states.

Last month, Switzerland’s continued cohesion payments looked assured, but the EU’s half-hearted approach to Swiss financial equivalence has infuriated many politicians.

SIX reaction

The Swiss stock exchange, SIX Group, said in a statementExternal link on Thursday acknowledged the EU’s decision but regretted its “temporary nature”. 

“In recent months, the necessary steps were undertaken to ensure that SIX Swiss Exchange attains the status of an equivalent third-country trading venue. The necessary recognition by the European Union of the equivalence of the Swiss legal framework was granted for a temporary period of one year with the EU Commission’s decision of 21 December 2017,” it said. 

“SIX acknowledges that the EU Commission thereby recognises in principle the equivalence of the Swiss legal framework. SIX does, however, regret the temporary nature of the decision and is working on the assumption that equal value will be definitively recognised at a later date.”