Switzerland is uniquely positioned as a listing destination, yet tech companies sometimes gravitate in their listing considerations toward the US in pursuit of higher valuations and broader perceived advantages such as investor access, liquidity, and research coverage. To separate fact from fiction around these factors, SIX has published a new edition of the white paper ‘Evaluating the Aspects of a Swiss versus a US Listing’. The findings reveal that Switzerland’s IPO credentials stack up strongly against the US.
Access to US investors does not require a US listing. A listing on SIX Swiss Exchange enables issuers to target US institutional buyers via a Rule 144A offering, which allows securities to be sold to qualified institutional buyers without needing to register with the US Securities and Exchange Commission. At the same time, Switzerland has one of Europe’s largest pools of investor capital – valued at USD 207 billion – which is second only in size to the UK.
Another misconception is that the US offer unrivalled liquidity, relative to Europe. In reality, the liquidity gap between the leading US exchanges and their European peers is overstated. A comparison of 90-day post-IPO average daily trading volumes relative to market capitalization shows that while US IPOs generally have a higher turnover velocity than their European counterparts, this is only true for US domestic issuers. Smaller foreign private issuers (FPIs), in particular, do not appear to benefit from the same liquidity uplift. European and Swiss markets consistently deliver tighter bid–ask spreads than US exchanges – an essential indicator of trading efficiency.
The gulf between analyst coverage in the US and Europe is also narrow. Analysis shows FPIs in the US do not automatically benefit from broader analyst coverage and may struggle for consistent attention without strong brand recognition or a significant US investor base.
And finally, while Switzerland may be one of the more expensive places in the world to live, the cost of going public on SIX Swiss Exchange is relatively low, when benchmarked against other leading markets. Underwriting fees in Switzerland range between 2% to 5% of gross proceeds, whereas in the US they average 4% to 7%. Legal fees and regulatory compliance costs are also reined in by Switzerland’s proportionate, principles-based regulatory framework resulting in a more predictable, efficient, and issuer-friendly path to the public markets. These aspects also lower the execution and liability risks for issuers.
Further information: Evaluating the Aspects of a Swiss versus a US Listing