The European Commission has proposed a six month extension to its decision to recognise Swiss share trading venues as eligible to trade within the EU.
The extension would allow EU companies and markets to continue to do business with Swiss share trading venues in 2019 as part of the EU’s wider financial services equivalence system, which allows traders and brokers inside the EU to access the best deals for investors while remaining in compliance with EU law. The criteria for extending the equivalence into 2019 were written into the 2017 Implementing Decision of the equivalence currently in place, which states: “When deciding on whether to extend the applicability of this decision, the Commission should in particular consider progress made towards the signature of an Agreement establishing that common institutional framework.”
In drawing up its proposal for an extension, the Commission took into account the Swiss Federal Council’s ongoing consultation on the Institutional Framework Agreement between the EU and Switzerland, which covers bilateral arrangements on matters such as free movement, industry standards, agriculture, air and land transport. The consultation will last until spring 2019; but the Commission determined that Swiss share trading venues are sufficiently important to EU trade that allowing them continued equivalence would be necessary to meet the EU’s stated trading obligations.
Valdis Dombrovskis, Vice President for Financial Stability, Financial Services and Capital Markets Union, said: “A temporary extension of equivalence should provide time to Switzerland to finalise its internal consultation on the Institutional Framework Agreement. It will also ensure continuity for portfolio managers and brokers active in Swiss equities. We want that European firms can continue trading in Swiss equities both in the EU and on the Swiss exchanges. Open and competitive stock markets are vital for a healthy economy and to provide reliable income sources for investors in equities.”
The Commission’s proposal to extend equivalence for Swiss share trading venues must now be consulted on with Member States, so that the measure can be adopted before the end of 2018.
