The European Union confirmed it will not extend equivalence for the Swiss stock exchange as of 31 December. Discussions are not ended: the Swiss Federal Council is expected to provide a formal statement, while President of the Confederation and Head of the Department of the Interior Alain Berset is planning to discuss the matter with EU Commission President Jean-Claude Juncker in the coming days. A recent letter from the EU lists potential sanctions against Switzerland.
For now, despite 30% of trading volumes in Swiss stocks carried out on EU platforms, we expect some volatility in Swiss stocks.
The EU estimates that dual-listed shares from Switzerland are traded significantly in the EU, requiring compliance with EU rules. Australian, Hong Kong and US shares are traded less significantly, thus not requiring further regulation. An institutional agreement that grants judiciary powers to the European Court of Justice would make disputes more cumbersome and jeopardise Swiss rules.
The Swiss government has allowed a ban of Swiss shares on EU exchanges, which has been supported by the Swiss Bankers Association and the Federation of Multinational Corporations. EUR/CHF is currently trading at 1.1336, approaching the 1.1350 range.
Disclaimer: While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein. This document does not constitute a recommendation o sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investment.
Although every investment involves some degree of risk, the risk of loss trading off-exchange forex contracts can be substantial. Therefore if you are considering trading in this market, you should be aware of the risks associated with this product so you can make informed decisions prior to investing. The material presented here in not to be construed as trading advice or strategy. Swissquote Bank makes a strong effort to use reliable, expansive information, but we make no representation that it is accurate or complete. In addition, we have no obligation to notify you when opinions or data in this material change. Any prices stated in this report are for information purposes only and do not represent valuations for individual securities or other instruments.
By Vincent Mivelaz