Christian Reuss, with just a few trading days left in 2021: how would you describe the year?
It’s been challenging, and despite our hopes and efforts we have not returned to normality with regards to the COVID situation. But compared to 2020, when our infrastructure passed a stress test of unprecedented volumes, we’ve seen a return to stability with regards to volatility in the markets. So although our trading volumes and the number of transactions have decreased, markets have strongly recovered. The SMI, our Swiss blue chip index, has reached several new all-time highs this year and, as of 23 December, is up 19.5%.
Has the resurgent competition in equity trading also caused volumes to decline?
Yes, it obviously makes a difference when your market share isn’t 100% anymore. But we always considered this an anomaly and never changed our competitive mindset. We are in favor of open markets and kept developing new services in close collaboration with our customers – not only in the trading space, also with regards to listing and capital raising.
What were the highlights in the trading space for you?
The introduction of Swiss EBBO and SwissAtMid Block orders were major milestones. Both offer unique benefits to our participants. Swiss EBBO improves access to best price and depth of liquidity. It is operated via an additional order book to the lit Central Limit Order Book (CLOB) and our non-displayed liquidity pool SwissAtMid – which celebrated its fifth anniversary this year. Our new Block orders make interacting with unique liquidity in SwissAtMid more attractive, allowing our participants to manage fragmentation and execute large blocks more efficiently.
And what were the milestones in the listing space?
Just like price discovery on the trading side, enabling capital raising is one of our core functions as an exchange. In this space, we significantly broadened our offering in 2021. We launched Sparks, our new equity segment for SMEs. Small and medium-sized enterprises are the backbone of the Swiss economy, and we now offer them a dedicated market to support their growth and visibility. We also continued to develop specific services for SMEs, such as the Sparks IPO Academy, an exclusive training program for executives of SMEs with high growth ambitions.
Furthermore, we received regulatory approval for the new standard for Special Purpose Acquisition Companies, or SPACs in short. Just a few days after its entry into force we even saw the first successful SPAC listing. In the meantime, we also continued to enhance established services for issuers such as Stage and Bridge.
Have there been other service enhancements?
If we look at investment products, the internationalization of CONNEXOR was certainly a highlight: we’ve rolled out our platform that standardizes and automates the collection and distribution of reference data for structured products in the Asia-Pacific market. And we launched a new API which allows our reference data consumers to obtain data of specific structured products, instead of mass downloads of large bulks.
Last but not least, we’ve added new functionalities in Deal Pool, the central electronic support tool for the Swiss Franc fixed income primary market, and enhanced our Quote on Demand trading service to improve execution quality in ETFs and ETPs. So there has been a great variety of initiatives, but all with one common goal: making listing and trading on the Swiss stock exchange more attractive for all our stakeholders.
Are you satisfied with the results?
Overall, yes. Five new companies listed on SIX Swiss Exchange in 2021: besides the SPAC listing by the VT5 Acquisition Company, we saw the IPOs of PolyPeptide, Montana Aerospace, medmix and SKAN, for a total transaction value in excess of CHF 2 billion and an overall market capitalization of around CHF 8 billion. As per end of November, about CHF 100 billion were raised in bonds and money market papers.
We also saw twelve new product issuers joining us this year, offering investors new ETFs, ETPs, investment funds and structured products. And we welcomed three new trading participants with Exane, Hudson River Trading Europe and SSW-Trading GmbH, further diversifying our membership basis.
If you’d have to pick one product segment that stood out this year, which would it be?
That’s tricky, because we’ve seen structured products steadily growing – so much so that in December, we’ve reached a new record of over 45,000 tradeable products! But perhaps even more striking has been the growth of ETPs with crypto-currencies as underlying. Six of our twelve new product issuers are ETP providers, and they’ve launched a record number of 81 products. Of these, 74 were Crypto-ETPs, and with them, seven new currencies were introduced, several a world’s first to be available on a regulated exchange.
This expansion of the product range reflects the growing interest by investors, which resulted in soaring trading volumes, obliterating the records of previous years. And while we’ve seen trade sizes in ETFs get smaller, indicating a broader use by private investors, the trading volumes in crypto ETPs hint at a widespread adoption among institutional investors – both trends that we expect to continue in 2022.
In conclusion, what will you remember most about 2021?
I’m proud that once again, we’ve ensured stability and reliably performed our core functions as a stock exchange – while expanding our offering in both the trading and capital raising spaces. A gratifying memory will certainly be that in 2021, we’ve received more industry awards than ever before, both as an exchange, but also on the level of product segments and – which I appreciate the most – on an individual level, for members of our staff.
It’s great to see them recognised by our clients and peers for their expertise and dedication. This makes me confident that our future innovations and improvements will continue to be geared towards market needs, and that we’ll find solutions for the challenges that lie ahead, with and for our clients. Because for us, they will remain front and center in everything we do.
Christian, thank you very much for this interview.
In 2021, SIX Swiss Exchange is proud and thankful to have received a broad variety of awards. In March 2021, SRP Europe named it Best Structured Products and Derivatives Exchange at the SRP Europe Awards. A special prize for a trading venue followed at the XENIX ETF AWARDS Switzerland. This was topped in June, when the Swiss stock exchange was named Exchange of the Year at the FN Trading & Technology Awards. On an individual level, the Swiss Structured Products Yearbook ranked André Buck, Global Head Sales & Relationship Manager, and Sébastien Neukom, Head Structured Products Sales, among the 30 key players in the industry. Furthermore, Jennifer Hlad, Head Equity Sales UK & Ireland, was named the winner in the Excellence in Exchanges category at Markets Media’s European Women in Finance Awards. Last but not least, Aluflexpack, a leading manufacturer of flexible packaging solutions listed on SIX Swiss Exchange, won the coveted Star of 2021 award at the European Small and Mid-Cap Awards in November.