The European Commission has adopted a decision to recognise trading venues in Switzerland as eligible for compliance with the trading obligation for shares set out in the new Markets in Financial Instruments Directive and Regulation (MiFID II/MiFIR), which will apply in the EU as of 3 January 2018. The decision ensures that businesses and markets can continue to operate smoothly and without any market disruptions after 3 January 2018. Going forward, the Commission will
closely monitor the impact of today's decision and consider the broader political context, notably the progress in the negotiation of the institutional agreement with Switzerland. The decision is limited to one year, until 31 December 2018.
The EU's equivalence system in the area of financial services legislation encourages international regulatory convergence and facilitates financial services flows between the EU and third countries. Equivalence decisions are always based on the specific circumstances of the country concerned and there is no automatic right to equivalence.
Switzerland differs from other jurisdictions which have been recently been granted equivalence in several ways. The scope of the Swiss decision is much greater, as the trading of Swiss shares in the EU – and vice versa – is more widespread than with the other jurisdictions – the US, Hong Kong and Australia – which were recently recognised. For example, every share in the Swiss top 20 index is traded in the EU. Therefore trading in Switzerland will have a bigger and more immediate impact on the integrity of EU financial markets, including in the case of prevention of market abuse.
There are also far closer commercial ties binding the EU and Switzerland, which require a special framework. The decision takes into account General Affairs Council conclusions of February 2014 and more recently the Council conclusions of February 2017, which stated that no further the market access should be granted to Switzerland until the institutional agreement is in place. It is also in line with the Swiss Federal Government's intentions, according to which the institutional agreement should be concluded by the end of 2018.