Switzerland is a well-developed investment destination and qualifies for an unlimited extension of stock market equivalence along with a host of other third countries. The Federal Council which has insights on this issue have confidence that such a development would be widely beneficial for stock market players in Switzerland.Swiss shares trade: Foreign venues need recognition from FINMA
Swiss shares trade: Foreign venues need recognition from FINMA
In recent developments, foreign trading venues that admit Swiss shares to trading must now go through registration Swiss Financial Market Supervisory Authority (FINMA). This requirement came into effect from January 1st, 2019.
The Federal Department of Finance (FDF) has noted the European Commission's decision of 20 December 2018 to extend Switzerland's stock market equivalence until the end of June 2019. The FDF established the Federal Council Ordinance of 30 November 2018 on the Recognition of Foreign Trading Venues to this effect. The ordinance allowed for EU trading venues to attain FINMA recognition during the period prior to the expiration of the EU’s decision.
The Federal Council Ordinance of 30 November 2018 was crafted to provide protection to Swiss stock exchange infrastructure. This was achieved by introducing a recognition obligation effective from 1 January 2019 for foreign trading venues that admit Swiss shares to trading.
Foreign trading venues that admit Swiss shares to trading must be recognized by the Swiss Financial Market Supervisory Authority (FINMA), starting January 1st 2019. The Federal Department of Finance (FDF) has noted the European Commission's decision of 20 December 2018 to extend Switzerland's stock market equivalence until the end of June 2019.
Thus, the FDF Passed the Federal Council Ordinance of 30 November 2018 on the Recognition of Foreign Trading Venues. The ordinance has created the obligation to allow EU trading venues to obtain the new FINMA recognition for the time being as well.
The measure adopted on November 30th 2018 is meant to protect Swiss stock exchange infrastructure, introducing a recognition obligation effective from 1 January 2019 for foreign trading venues that admit Swiss shares to trading.
Affected trading venues
The FDF revised the list of jurisdictions, thus EU trading venues now also fulfill the requirements for the new Swiss recognition.
The affected EU trading venues are recognized by the FINMA, starting January 1st 2019 and they don’t have to submit an application for admission. As this is an EU temporary extension of stock market equivalence, the ordinance practically has no effect for the moment, as the ordinance will stay in force.
Requirements for recognition for foreign trading venues
For foreign trading venues to attain FIMNA recognition, the ordinance states that they should have their registered office in a jurisdiction that is not contained within the list maintained by the FDF. Recognition will be forfeited in the event that the foreign trading venue sets up its registered office in one of the listed jurisdictions. If a trading venue where Swiss equity securities are traded now or in the future is not included on FINMA’s list, it can file an application to be recognized.
For more details and assistance regarding the Swiss stock market, you can reach out to our expert consultants. Our highly experienced and well-informed team is ready to answer all your questions and give you all the help you might need.
Add new comment