Saturday 20 July 2019

Switzerland threatens to ban EU exchanges from trading in Swiss shares

Stock photo
Stock photo

John Revill

The Swiss government has said it's ready to ban stock exchanges in the European Union from trading Swiss shares - intensifying a row over a stalled partnership treaty.

The move follows the EU not extending stock market equivalence to Switzerland after Brussels grew frustrated with Swiss footdragging on the long-discussed agreement.

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In response Bern said it would withdraw recognition from trading venues in the EU from July 1 to "protect the Swiss stock exchange infrastructure in the event of non-extension".

"Trading venues in the EU would thus be prohibited from offering or facilitating trading in certain shares of Swiss companies from that date," the Swiss government said.

It could now see investors in the European Union and Switzerland lose direct access to each others' stock exchanges from July 1.

The EU refrained from extending stock market equivalence, because the Swiss did not endorse a partnership treaty with the EU that had been negotiated for years, a diplomat told Reuters on Friday.

Bern's request this month for "clarifications" on three areas - protecting wages, regulating state aid and defining the rights of EU citizens in Switzerland - is seen in Brussels as demands to reopen the treaty text, which the EU refuses to do.

Six, the operator of the Swiss bourse, said it welcomed the Swiss decision to activate the protective measures, as this meant EU market participants could still access the Swiss domestic market and continue to be able to trade Swiss shares directly at Six.

Swiss stocks include heavyweights like Nestle, Roche and Novartis.

The hardening EU stance is also partly linked to Brexit, as a lenient approach to the Swiss could encourage London to seek softer terms.

Reuters

Irish Independent

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