Six prompts EU to recognise Swiss financial market regulation as equivalent

The Six Swiss Exchange has reported that its operating income for 2016 was up 1.5% while operating profit rose 2.9% to CHF287.1m (€265.8m). Six generated earnings before interest and tax (Ebit) of CHF297.1m and group profit of CHF221.1m, according to its 2016 results. The exchange reported that while all other business areas posted growth, less volatility in financial markets impacted the results of the stock and structured products exchange.

Overall, Six recorded a 1.5% increase in operating income, while operating profit rose 2.9% to CHF287.1m. Trading turnover totalled CHF69.3m, 18.6% lower than in the previous year. The exchange pointed in its 2016 results that the Mifid 2/Mifir (Markets in Financial Instruments Directive or Regulation) and the Priips-Kid ordinance (Packaged Retail and Insurance-based Investment Products) are "driving the development of new products that support banks in fulfilling the new regulatory requirements and also make the corresponding processes cheaper (platform for providing basic information sheets, Kid)".

According to the exchange, the EU must recognize Swiss financial market regulation as equivalent by the end of 2017 so that participants based in an EU country can continue to trade on a Swiss stock exchange. Six is working hard on implementing the requirements.

In the first two months of 2017, Six Swiss Exchange and Six Structured Products Exchange trading platforms reported trading turnover totalling CHF228.5bn (€211.6bn), a moderate 2.8% decline year-on-year. Trading turnover was generated by a smaller number of transactions than in the previous year, according to the exchange. The number of trades fell 16% to 8,178,660 while the average daily trading turnover stood at CHF5.6bn.

Novartis N the best seller stock in February according to Six also appeared as the most utilised share in the Swiss non-listed structured products market, including non-retail and tranche-based, alongside Nestle and Roche. Year to date, underlying baskets comprising the three shares have featured in 96 products and sold an estimated CHF156m. The second most popular underlying in Switzerland YTD is an index basket comprising the Eurostoxx 50, S&P 500 and SMI which appeared in 59 products and sold an estimated CHF110m; followed by the Credit Suisse share which was the most utilised single underlying featuring in 30 products that sold an estimated CHF36m.

The Swiss exchange reported that the exchange-traded funds (ETF) segment has improved significantly. Trading turnover in this segment raised to CHF20.2bn YTD, an increase of 16.1% year-on-year. In the equities segment, funds and ETP trading turnover declined 4.7% to CHF178.5bn, with the number of trades down 16.1% at 7,835,130. However, turnover for structured products and warrants was down 23.9% at CHF2.5bn, while the number of trades declined 32.3% to 100,633. CHF bonds generated trading turnover totalling CHF 23.0 billion, a drop of 4.5%, with the number of trades falling 12.1% to 60,720.

In February, 29 new CHF bond issues (+123.1%) and 2,742 new structured products and warrants (-6.9%) were admitted to trading. In the year to date, issuers have launched a total of 42 new CHF bonds (+13.5%) and 5,688 new structured products and warrants (-22.7%) on Six Swiss Exchange and Six Structured Products Exchange.

The Swiss exchange also reported that its blue chip SMI index closed at 8,545.8 points at the end of February (+3.1% month-on-month; +4.0% against end-2016). SRP data shows that the SMI index was featured in 28 products mainly in combination with other indices including the Eurostoxx 50, S&P 500, Nikkei 225 and DAX, and with a dual payoff profile featuring reverse convertible and worst-of options.

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