Although Brexit has caused material disruption for euro-share trading in London, it is opening up potential opportunities for the UK and Switzerland to further cement their relationship. Earlier this year, the UK and Swiss authorities agreed on equivalence measures allowing for UK companies to be traded on Swiss venues, and vice versa. This comes following the EU’s refusal to grant equivalence to SIX Swiss Exchange back in 2019, which in turn resulted in the Swiss authorities banning EU venues from trading Swiss securities.
“With Brexit, the UK is now able to make agreements with other countries more freely. Some of the topics they are going to address were not on the agenda between the UK and Switzerland when they were part of the EU. So, it is an opportunity to really improve things and streamline processes. I think it could bring up a lot of opportunities,” noted Hlad.
Nonetheless, Brexit is creating other challenges for Switzerland, not least around market fragmentation. Hlad said that the UK had recently lowered the thresholds around pre-trade transparency for large-in-scale waivers. At the same time, the European Securities and Markets Authority (ESMA) has its own guidelines for large-in-scales. As a result, Hlad said there are now three distinctly separate regimes for large-in-scales in markets such as Switzerland, which she added is creating all sorts of confusion.