Latest Developments

June 2022: SIX welcomes the Federal Council decision to transfer the contingency measures into ordinary law

During its meeting on 22 June 2022, the Federal Council adopted the dispatch on incorporating the measure to protect the Swiss stock exchange infrastructure into the Financial Market Infrastructure Act (FinMIA). This step is necessary, as the protective measure will otherwise cease to apply and the European Union (EU) has not yet recognised the equivalence of Swiss stock exchange regulation.

SIX welcomes the Federal Council decision to transfer the contingency measure, originally activated on 1 July 2019, to ordinary law which safeguard the interests and strengthen the functioning of the Swiss capital market. Transferring these protective measures into ordinary law was a rational conclusion in light of the current situation.

Read the full press release of the Federal Council.

February 2021: SIX welcomes acceptance by the United Kingdom and recognition of respective UK trading venues by FINMA

Following the recognition of Swiss stock exchange regulation by the UK, which came into force today, the Federal Department of Finance (FDF) has lifted the restrictions on the UK in return (adjusted list FDF). At the same time, the Swiss Financial Market Supervisory Authority FINMA has added the UK trading venues to the list of recognised foreign trading venues pursuant to the Federal Council Ordinance of 30 November 2018 (Ordinance) (FINMA message). With the completion of this process, trading in Swiss shares on UK trading venues can resume (also refer to SIX media release).

January 2021: UK initiates parliamentary process to approve equivalence for Switzerland

On 31 December 2020, the transitional period set out in the UK-EU Withdrawal Agreement ended and with this, the UK is free to enter bilateral agreements with third countries, and specifically to approve equivalence for Switzerland, independently from the EU.

Therefore, on 13 January 2021, the UK Treasury has laid before Parliament the regulation to accept Switzerland’s legal and supervisory framework as equivalent (see Link). This regulation will come into force on 3 February 2021. Subsequently, we expect Switzerland to reciprocate by removing restrictions on UK trading venues. Once this is completed, trading in Swiss shares will be able to recommence on UK trading venues. In relation to the EU, the Ordinance remains in force unchanged. SIX will keep its clients informed about any further relevant developments.

January 2020: Due to Brexit, FDF adds UK to the list of non-recognised jurisdictions

On 31 January 2020 at midnight (Swiss time), the membership of the United Kingdom (UK) in the European Union (EU) ended. At that time, the transitional period set out in the UK-EU Withdrawal Agreement begins (at least until the end of 2020; extendable by up to one year and two years respectively). During this transition period, the UK will remain bound by EU law. During the transition period, the Ordinance of the Swiss Federal Council must remain applicable to trading venues based in the UK. The FDF has therefore updated the list with effect from 1 February 2020 and included the UK in the list as a separate entry to the EU (see SFI message). This will not change anything for trading in shares listed on the Swiss Stock Exchange until the end of the transition period.

June 2019: FDF confirms activation of Federal Council Ordinance as of 1 July 2019

On 27 June 2019, the Federal Department of Finance (FDF) confirmed (press release) that the Federal Council Ordinance of 30 November 2018 on safeguarding the interests and strengthening the functioning of the Swiss capital market will be activated as of 1 July, as it is no longer expected that the EU Commission will extend the Swiss exchange equivalence in good time.

June 2019: FDF announces to activate the Swiss Federal Council’s Ordinance in case of no extension by 1 July

The Federal Department of Finance (FDF) announced on 24 June 2019 (see press release) that it will activate the Swiss Federal Council’s Ordinance from 30 November 2018 on safeguarding the interests and strengthening the functioning of the Swiss capital market as of 1 July in case the EU Commission has not announced by then that it would extend Switzerland’s exchange equivalence in good time. SIX welcomes this measure as it ensures that EU market participants continue to have access to the Swiss domestic market and can trade Swiss equities here. Accordingly, SIX is prepared for the activation of the Ordinance (media release).

December 2018: EU confirms extension of Switzerland's exchange equivalence for half a year

On 14 December 2018, the EU Commission proposed to the European Securities Committee, consisting of the 28 member states, to vote for an extension of Switzerland’s exchange equivalence for half a year until 30 June 2019 (press release of 17 December 2018). As a result of this consultation, the EU published an announcement on 20 December 2018 confirming the extension.

The ordinance adopted by the Federal Council on 30 November 2018, which aims at protecting the Swiss stock exchange infrastructures, remains in force. In practice, it will have no effect for the duration of the temporary extension of the exchange equivalence.

What is the issue?

Under MiFIR Art 23, Switzerland needs an equivalence decision from the EU Commission

On 3 January 2018, MiFID II / MiFIR was implemented in the EU with the aim to increase market transparency and thus improve market stability and investor protection. MiFIR Article 23 introduced an obligation for European investment firms to trade shares on a trading venue in the EU or on an equivalent third-country trading venue (the so called 'trading mandate' or 'Share Trading Obligation'). This obligation covers all shares admitted to trading on a regulated market or traded on a trading venue in the EU, which includes most of the equity securities traded on SIX and means that Switzerland needs equivalent third-country status under MiFID II / MiFIR in order for EU trading participants to be allowed to continue accessing the Swiss market locally.

EU granted equivalence only for 1 year

On 21 December 2017, the EU Commission ('EU Com') issued an Implementing Decision granting Switzerland equivalence and formally confirming the requirements to achieve this status had been fully and unequivocally met. However, the decision on Switzerland was limited to a period of 1 year and expired on 31 December 2018. EU Com stated they will closely monitor the impact of this decision and consider the broader political context, notably the progress in the negotiation of the institutional agreement with Switzerland before extending.

Swiss Federal Council's Ordinance

In June 2018 the Swiss Federal Council expressed its intention to implement a contingency measure and announced on 30 November 2018 the implementation of an Ordinance based on the Federal Constitution. The Ordinance entered into force on 30 November 2018. The Ordinance aims at protecting and safeguarding the functioning of the  Swiss stock exchange infrastructures as an essential element of the Swiss financial system. On 1 January 2019 it introduced a new recognition regime for foreign trading venues which trade equity securities (e.g. shares) issued by companies with registered offices in Switzerland where such equity securities are listed on a Swiss stock exchange or are traded on a Swiss trading venue ('Swiss shares').

Based on the new recognition regime, FINMA will only grant recognition if the jurisdiction, in which the foreign trading venue is located, does not restrict market participants from trading Swiss shares on trading venues in Switzerland. If this condition is not met, the foreign trading venue will not be granted recognition by FINMA; consequently, these venues will not be allowed to offer trading in Swiss shares.

The intended consequence of the Ordinance is that EU investment firms should continue to have access to the Swiss domestic market and continue to be able to trade Swiss shares in their home market, because the shares are no longer subject to the EU trading mandate (Share Trading Obligation) in MIFIR Art. 23. The Ordinance is designed in such a way that in case of an extension of the stock exchange equivalence, in practice, the Ordinance would have no effect on market participants.

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