Swiss fi­nance min­is­ter hopes to solve EU stock ex­change im­passe

Gulf Times Business - - BUSINESS -

Switzer­land still hopes to solve a dis­pute with the Euro­pean Union over its stock ex­changes, though the mat­ter is linked to progress in as-yet dead­locked po­lit­i­cal talks. The Swiss have only been granted tem­po­rary equiv­a­lence un­der the EU’s MiFID II regime, which means their stock mar­ket risks be­ing ruled off lim­its to EU traders from next year.

Fi­nance min­is­ter Ueli Mau­rer says prob­lem is po­lit­i­cal, rather than tech­ni­cal, and that Bri­tain’s ne­go­ti­a­tions with Brus­sels doesn’t make life eas­ier.

“We still hope that we find a so­lu­tion by the end of the year, at least for a year’s ex­ten­sion,” he said in an in­ter­view. “It’s a po­lit­i­cal ques­tion, the EU has made it con­tin­gent on progress on the frame­work agree­ment, and it’s still pretty dif­fi­cult at the mo­ment to eval­u­ate this progress.”

The im­passe be­tween Bern and Brus­sels stems from ne­go­ti­a­tions over a pro­posal to stream­line re­la­tions and re­place a se­ries of bi­lat­eral agree­ments on ev­ery­thing from agri­cul­ture to civil avi­a­tion with an over­ar­ch­ing frame­work agree­ment. Much like Brexit, key is­sues in­clude fi­nan­cial sec­tor mar­ket ac­cess, im­mi­gra­tion, and dis­pute set­tle­ment.

“The ques­tion is whether we can over­come the cur­rent and recog­nised hur­dles, so that there’s an agree­ment in some form,” he said on the side­lines of the In­ter­na­tional Mon­e­tary Fund and World Bank’s an­nual meet­ing. “That still re­mains to be seen.” Ne­go­ti­a­tions be­gan in 2014 and at one point were ex­pected to con­clude this year. Yet the two sides can­not agree about labour mar­ket rules. In Switzer­land, both euro- skep­tics and la­bor unions don’t want the govern­ment to make con­ces­sions on a sys­tem pro­tect­ing high lo­cal wages. About a third of trad­ing in Swiss shares cur­rently takes place within the EU and the rest in Switzer­land, ac­cord­ing to ac­cord­ing to Romeo Lacher, chair­man of SIX Swiss Ex­change AG.

And the ma­jor­ity of the ac­tiv­ity in Swiss shares on SIX comes from traders in the EU, giv­ing an idea of what the com­pany has to lose.

If equiv­a­lence, which is set to ex­pire in De­cem­ber, doesn’t get ex­tended, the Swiss govern­ment has laid out a con­tin­gency plan that would pro­hibit Swiss shares from be­ing traded in the EU, in the­ory redi­rect­ing deal­ing back to Switzer­land.

“I think it’s doable,” Mau­rer said. “Not a last­ing so­lu­tion but us­able and ac­cepted as an emer­gency so­lu­tion.”

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