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Bourse turns its back on merger mania

Peter Gomez, chairman of the Swiss stock exchange board, is resisting the urge to merge Keystone

A strategic review by the Swiss stock exchange (SWX) rules out the option of a future merger with another bourse but favours further international collaborations.

Chairman Peter Gomez says the SWX will remain independent to preserve its status as a self-regulatory body and safeguard the tradition of banking secrecy.

Friday’s publication of the review findings comes against the backdrop of increasingly frenetic merger and takeover speculation among the world’s leading exchanges.

The London Stock Exchange has repeatedly rebuffed takeover bids from the United States electronic trading platform Nasdaq. The Paris-based Euronext has also been at the centre of a tug-of-war between the New York Stock Exchange and the German Börse.

Earlier this month a consortium of seven leading banks, including Credit Suisse and UBS, announced plans to launch a new trading platform in London.

The Swiss exchange had previously spurned a merger advance by Germany’s Deutsche Börse in 2004 and has repeatedly ruled out any others.

European Union regulations that come into force in November 2007 will change the landscape of European exchanges by liberalising the sector to make it more competitive.

However, Gomez was adamant that the SWX would not be throwing itself into the current “merger mania”.

“The SWX will not be striving for mergers with other bourses in the immediate future,” he said.

“The board has signed off a strategy that contains no grounds for a fundamental correction of course. The participants of the Swiss financial market want to remain owners of an SWX that distinguishes itself as an independent entity.”

Limited tie-ups

Gomez added that the SWX would continue to pursue its current strategy of limited tie-ups in specific areas with rivals.

The two bourses jointly own the Eurex electronic derivatives trading platform and the Stoxx securities market indices provider. They have also signed an agreement to create a new joint venture to trade securitised derivatives, called Alex, which will come into operation on January 1.

“The SWX can achieve its goals through continued innovative partnerships on an international level that will create additional added value,” Gomez said.

But he would not speculate on details of any new planned cooperation.

The Swiss stock exchange is in a healthy position thanks to sinking infrastructure costs that benefit medium-sized bourses, Gomez concluded.

swissinfo, Matthew Allen in Zurich

The SWX Swiss exchange is controlled by an association of 55 banks, all of which have equal voting rights.

Peter Gomez was appointed as chairman of the SWX board in May 2006. One of his first acts was to commission the strategic review.

Stock exchanges are also faced with new European Union regulations, known as MiFID, which will allow rival trading platforms to buy and sell shares from November 2007. The new regulations are expected to drive down fees charged for clearing and settlement.

As a result SWX slashed in September its fees for trading on its electronic trading platform virt-x.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR