The European Commission has confirmed the effective extension of access to Swiss stock exchanges until June 2019, which effectively puts an end to a threat by the EU executive to cut Switzerland off from having access to the bloc’s markets before the first of the year.
The EU-Swiss negotiations on a treaty have been ongoing for more than four years. The main focus of the negotiations is to make bilateral relations more streamlined as the current status is scattered between more than 120 sectorial pacts.
In order to apply pressure on Bern, the European Commission decided to link the extension of the equivalence regime for Swiss exchanges to the endorsement of a new treaty by the Swiss government. This effectively tied the ability of the SIX Swiss Exchange – the country’s main stock exchange – and other trading venues, to service their EU clients after December to a new agreement.
The Swiss negotiating team was forced to request more time from Brussels, which the Commission granted for another six months. The European Union is hoping that by giving the Swiss more time to approve the establishment of a mechanism and to adapt to new EU rules, this will allow the European Court of Justice time to formulate their own decision on the application of EU laws in Switzerland.
“We want European firms to continue to trade in Swiss equities, both in the EU and on the Swiss exchanges”, said Valdis Dombrovskis, said the EU commission’s vice-president for financial services policy, adding that the aid the extension to June 30 would “ensure continuity for portfolio managers and brokers active in Swiss equities”.