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.