ZURICH / LONDON (Reuters) – Britain can now claim at least one advantage of leaving the European Union: The Swiss government will allow Swiss shares to trade on the London market again.
Trading will resume on Thursday after Switzerland lifted its 19-month ban on Wednesday. That would partially cover the City of London’s trading losses in euro shares to the EU last month after Britain finished leaving the bloc.
Brussels stopped EU investors from trading on Swiss exchanges in June 2019 after a disagreement over an agreement. Switzerland later banned EU exchanges from trading Swiss stocks.
But Britain has not been bound by EU rules since leaving the bloc completely, and the countries are working to rebuild bilateral ties. Switzerland is not a member of the EU, and on Wednesday, Swiss financial market watchdog FINMA said here trade can be continued.
The return to Swiss trading will be of little benefit to the London equity markets. Brexit causes daily stock trading of over 6 billion euros ($ 7.21 billion) in EU stocks leaving London for platforms in Amsterdam and Paris on January 4.
Prior to the EU ban, the London platform handled about 1.2 billion euros daily in Swiss shares, or about 27% of total volume, Cboe Europe figures show. The list of tradable shares includes names such as Nestle and Novartis.
Cboe Europe, Aquis Exchange and the London Stock Exchange’s Turquoise said they will start offering trading in Swiss stocks in London on Thursday.
“The recent agreement between the UK and Switzerland on stock exchange equivalents is a welcome development,” said Turquoise CEO Robert Barnes.
“This will increase liquidity and trading efficiency in hundreds of securities for the benefit of issuers and investors in both financial centers.”
Swiss exchange operator SIX welcomed the news.
“We have always supported open and international capital markets, and this is in the interest of both national and international investors,” said SIX Chairman Thomas Wellauer in a statement.
“Joint recognition of equality will enable fair exchange and competition between major financial centers in Switzerland and the UK.”
Reporting by Michael Shields in Zurich and Huw Jones in London; editing by Rachel Armstrong, Jason Neely, Larry King