EU sees no progress yet on recognizing Swiss stock exchanges

BRUSSELS (Reuters) - Talks between the European Union and Switzerland have not made enough progress to extend EU recognition of Swiss stock-exchange regulations beyond this year, European Commission Vice President Valdis Dombrovskis said in a letter.

FILE PHOTO: Picture shows the entrance hall of the headquarters of Swiss stock exchange operator SIX Group in Zurich, Switzerland November 20, 2017. REUTERS/Arnd Wiegmann

No accord on so-called “equivalence” rules by the end of December would result in SIX Swiss Exchange, the country’s main stock exchange, and other trading venues losing access to EU business.

The letter was sent to EU lawmaker Markus Ferber on Nov. 27, two days after Swiss voters rejected a referendum proposal to give the country’s laws priority over international law.

The vote was seen as a positive development for the talks with the EU, but new negotiations have still to begin in earnest. The Swiss cabinet is expected to discuss its next moves on Friday.

“At this point in time there is not sufficient progress in our discussions with the Swiss authorities to allow for the extension of the equivalence decision for Swiss stock exchanges beyond December 2018,” Dombrovskis said in the letter.

The Swiss Finance Ministry and the SIX Swiss Exchange declined to comment on Wednesday.

The EU and Switzerland have been negotiating for four years a new, overarching treaty to govern their relations, which are currently regulated by about 120 sectorial accords. So far, the talks have not led to a breakthrough.

Switzerland is integrated in the EU market but is not a member of the 28-country bloc.

The EU wants an overall framework agreement before extending recognition of Swiss exchanges beyond this year, when it would otherwise expire.

The new general agreement “aims to bring legal certainty and a level playing field in EU-Swiss relations, to the benefit of both EU and Swiss market operators,” Dombrovskis said.

He acknowledged that some progress was made in past months but concluded that “there are still some major unresolved issues”, without providing details.

Ferber, who is a member of the economic affairs committee of the EU parliament, said he had hoped last weekend’s referendum would break the deadlock.

He said the framework agreement and the equivalence decision should be kept separated. “The Swiss equivalence status should be judged merely on the basis of the technical analysis of the Commission services,” he said.

Additional reporting by John Miller in Zurich; editing by Philip Blenkinsop, Larry King