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Post-Brexit Swiss stock exchange looks to Germany for future EU access

About one quarter of SIX's clearing business comes via the London Stock Exchange


Switzerland’s stock exchange has approached Germany and other European financial regulators to secure its future working relationship in the European Union after the United Kingdom’s ‘Brexit’ vote.

The Zurich-based SIX Swiss Exchangeexternal link confirmed to that it had been in talks with Germany’s Federal Financial Supervisory Authority (BaFin) and a number of other national authorities following the UK’s June referendum to leave the EU.

“We are approaching the regulators in order to guarantee equivalence for our business,” said Stephan Meier, head of SIX’s media relations, confirming an earlier report in the Financial Times.

Most financial services firms are still deciding what to do after the Brexit vote. Switzerland is not a member of the EU but SIX has traditionally relied on its recognition by the UK’s Financial Conduct Authority to achieve the regulatory “equivalence” that enables it to trade across EU markets.

Switzerland has no formal bilateral financial services agreement with the EU. This means that it has to ensure that its financial regulations mirror those of the EU to gain access to the market. In addition, some financial players have a presence in EU states, or in the case of SIX, use other stock markets as a bridge into the single market.

London Stock Exchange

Approximately 80% of SIX’s clearing business is from outside Switzerland; one quarter comes via the London Stock Exchange, said Meier.

“Post-Brexit equivalence is crucial in the UK and in Europe,” he added.

SIX’s chief executive, Urs Rüegsegger, told the Financial Times: “London isn’t enough anymore, you need a country that is in the EU.”

Officials from the City and the British government insist that single market access is possible once the UK leave the EU.

Meier said it was hard to say how long the talks would take as there is a great deal of uncertainty.

“We don’t know how the situation will evolve and what kind of agreement the UK will reach with the EU. It’s too early to predict,” he said.

British Prime Minister Theresa May has signaled that she is in no rush to trigger the formal two-year round of exit talks with the other 27 members of the EU, amid divisions within her government about the kind of deal Britain hopes to strike.

Brexit Secretary David Davis said in early September that it was "improbable" Britain could remain in the EU's single market in goods and services while imposing restrictions on immigration from EU countries. May's spokeswoman later stressed that Davis was expressing his own opinion, not government policy.

SIX has remained resolutely independent despite a spate of stock exchange mergers in recent years – including the current proposed merger between the London and Frankfurt exchanges. In 2004, the Swiss stock market turned down an offer of a merger with the Frankfurt bourse.

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