Swiss stock exchange benefited from EU ban, says SIX president

The end of stock exchange equivalence between Switzerland and the European Union has given Europe’s third-largest exchange company a greater share of the market, says Thomas Wellauer, who also predicts benefits for its clients once Swiss shares begin trading again in London.

The president of SIX told the NZZ am Sonntag newspaper that his company has traded nearly 100% of all Swiss shares in the last 18 months, up from 70%, after the EU denied the Alpine nation stock exchange “equivalency”. This occurred in June 2019, after the two failed to agree on a political framework deal. Once Bern retaliated, Switzerland could no longer trade EU company shares and Swiss shares could no longer be traded in the EU.   

The gains in market share by SIX have been good for clients, as liquidity in Swiss equities has risen dramatically, Wellauer explained. But he also expects that part of that market share will go to the London stock exchange once it begins trading again in Swiss stocks.

“We welcome it because we are convinced that this competition is important for our clients,” he said.

After the Brexit transition period came to an end at the end of 2020, the British parliament approved legislation that reverses the EU ban, to which the UK had previously been bound.

In the interview Wellauer, who sits on the board of business association Economiesuisse, also addressed challenges for the domestic economy. He acknowledged that political differences within the business community on major issues such as the framework agreement, which is meant to govern ties between Bern and Brussels, made it more difficult to reach compromises.

“We are a small country, and our recipe for success is precisely that we have such a diverse economy,” he said. “It would be disastrous if a wedge were to be driven between different sectors and companies.”