Difficulties to trade Swiss shares

Switzerland not only offers you wonderful winter sports perspectives and picturesque mountain landscapes. The alpine republic also has more to offer than cheese, chocolate and many other delicacies. After all, the Swiss are also known to be doing well economically. The country is home to dividend stars such as Nestlé (the company has been increasing its dividend every year for 23 years) and health specialist Novartis, luxury goods manufacturer Richemont (e.g. Cartier and Montblanc) and watchmaker Swatch. This also makes Switzerland a popular investment destination for people looking for reliable companies with long-term growth prospects. However, trading in Swiss shares is not at all easy at the moment for people with a depository bank in Germany or Austria.

Switzerland and EU in dispute over stock exchange rules

Since 1st of July 2019, Swiss shares may no longer be traded on trading floors in the EU. This is because Switzerland and the EU are in dispute over trading conditions on stock exchanges. The core issue is so-called stock exchange equivalence. In concrete terms, this means that the states recognise among themselves that the same trading standards apply on all exchanges and that all market participants are therefore granted unrestricted access to all trading resources. For us investors, this is the desirable state, as high liquidity ensures the best prices for buying and selling securities.

However, the EU has granted Switzerland only temporary stock exchange equivalence. Switzerland is demanding unlimited recognition and therefore took protective measures. At present, trading in Swiss shares is prohibited on all EU trading locations. Trading is only possible in Switzerland and on non-EU trading floors.

Depending on the bank or broker the trading of Swiss shares has to be done in Switzerland or outside of the EU.

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