Switzerland’s Six Exchange recently decamped to a new modern-but-modest office in Zurich but behind the scenes its mood is anything but settled. Switzerland’s stock exchange faces the threat that the EU might be about to pull the plug on a large chunk of its business.
Six has been caught in a clash between Brussels and Bern over the affluent Alpine state’s future relationship with the EU. The stand-off could result in the Swiss exchange losing the EU’s “equivalence” status, which allows cross-border financial markets trading.
That has not escaped the attention of many in the City of London.
Alasdair Haynes, chief executive of Aquis Exchange, a London share trading venue affected by the uncertainty, said: “Everyone is looking to see how much flexibility there is with equivalence. The UK wants more flexibility, but I’m not sure Switzerland will be given it.”
With Brexit less than nine months away and forcing a rethink of the EU’s relations with “third countries”, Brussels wants to revamp the web of bilateral deals governing relations with Switzerland, which date from the early 1990s. But Bern has accused Brussels of “unacceptable” discrimination after it granted Six “equivalence” for just 12 months last December, given that other countries such as the US and Hong Kong had received unlimited recognition.
Some trading executives in London see any ruling as setting a precedent ahead of Brexit.
“This is political. The reason the Swiss haven’t been granted equivalence is it would read across to the UK,” said one trading executive who declined to be named. “It is a precursor to show that the EU has the power to repatriate securities trading to the EU.” [...]
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