Financial venues and exchanges all over Europe are taking steps to help strengthen their compliance ahead of the upcoming implementation of MiFID II in nearly two weeks. This includes SIX Swiss Exchange, which will now effectively allow European securities traders the ability to access the Swiss market once MiFID II comes into effect.
The decision came from the EU Commission today, which allowed the SIX Swiss Exchange to obtain temporary status as an equivalent third-country trading venue. In particular, Article 23 MiFIR requires that European investment firms trade shares on a trading venue within the EU or a third-country trading venue assessed as equivalent.
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Consequently, the latest decision will enable SIX Swiss to maintain an equivalence with the EU for a period of one year. The move is important for the venue, given that European traders will seamlessly be able to continue their trading activities without any disruption on accounts of the new MiFID II regime coming into effect.
Indeed, MiFID II has loomed over the financial services industry in Europe for over a year, with its deadline necessitating new compliance and risk management efforts. In terms of SIX Swiss, the decision from the Commission helps shore up its obligations with the EU. MiFID II requirements apply to all shares admitted to trading in the EU, which in essence affects the majority of Swiss equities traded on SIX.
However, recognizing this as an important consideration, SIX Swiss Exchange in recent months had already moved to the necessary steps, which resulted in today’s decision to obtain equivalency. It should be noted that as of now the equivalency is only extended for a period of one year, following the EU Commission’s decision.
It is still unclear what will happen beyond this yearly period – the EU Commission will have to again decide if SIX Swiss’ equivalency will be maintained or additional steps taken. SIX Swiss is hopeful of a more definitive outcome and long-term solution.