Measure to protect Swiss stock exchange infrastructure

According to the EU share trading obligation, EU investment firms can in principle trade Swiss shares on Swiss trading venues only if the EU has recognised the equivalence of the Swiss trading venues. The EU granted Switzerland stock market equivalence only until the end of June 2019, but did not extend it beyond that date. In response, on 1 July 2019, the Federal Department of Finance (FDF) activated the measure to protect the Swiss stock exchange infrastructure.

The Federal Council brought the measure to protect the Swiss stock exchange infrastructure (protective measure) into force on 30 November 2018, after the European Commission failed to extend Switzerland's stock market equivalence by that date. Since 1 January 2019, foreign trading venues have been subject to a recognition obligation if they admit certain shares of Swiss companies to trading or allow trading in such shares. The protective measure is designed to have no practical effect as long as stock market equivalence applies. Further information on the protective measure is contained in the explanatory document (see below).

In December 2018, the European Commission extended the stock market equivalence until the end of June 2019, but refrained from extending it beyond 30 June 2019. Consequently, with effect from 1 July 2019, the Federal Department of Finance (FDF) updated the list of jurisdictions that restrict their market participants in trading equity securities of companies headquartered in Switzerland on Swiss trading venues (see FDF list below), thereby activating the protective measure vis-à-vis the EU and its member states. The protective measure ensures that EU investment firms can continue to trade Swiss shares on Swiss trading venues even without EU stock exchange equivalence.

Stock exchange equivalence with UK

On 31 January 2020, the United Kingdom's (UK) membership of the European Union (EU) ended. Subsequently, the FDF activated the protective measure with respect to the UK as well. The transition period in the relationship between the UK and the EU expired on 31 December 2020.

The mutual stock exchange relations between Switzerland and the UK have now returned to normal: to this end, the UK government recognised Swiss stock exchange regulation as equivalent and submitted this decision to the UK parliament. The recognition of equivalence came into force on 3 February 2021, whereupon Switzerland was able to deactivate its protective measure in relation to the UK. On the same day, FINMA granted the necessary recognitions to UK trading platforms, meaning that trading in Swiss shares could resume on UK markets.

Extension and transfer to ordinary law

After the EU continued not to recognise the equivalence of Swiss stock exchange regulation, the Federal Council extended the validity of the protective measure to 31 December 2025 on 17 November 2021. At the same time, it launched the consultation on incorporating the protective measure into the Financial Market Infrastructure Act (FinMIA). 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 FinMIA. Otherwise, the protective measure would have ceased to apply.

The measure will remain temporary even after its incorporation into the FinMIA; it will initially apply for a period of five years, but can be deactivated at any time. The proposal was well received by all consultation participants.

The Swiss protective measure vis-à-vis the EU thus remains in force without change. With the proposal, the Federal Council wishes to continue to avoid adverse effects that threaten Switzerland as a stock exchange, financial centre and business location due to the lack of stock market equivalence with the EU. The Federal Council remains of the opinion that Switzerland meets all the requirements for unrestricted recognition of the equivalence of Swiss stock exchange regulation by the EU. The Federal Council's objective and the best solution for all affected market players in Switzerland and abroad therefore remain an unlimited extension of stock market equivalence.