Look back: Suspension of equivalence by the EU Commission in 2019

In 2018, the Markets in Financial Instruments Regulation (MiFIR) came into effect, introducing Article 23, which required EU investment firms to trade equity securities either (i) on an EU trading venue or (ii) on a third-country venue deemed equivalent (the “share trading obligation”). This obligation applied to equity securities (i) admitted to trading on an EU regulated market or traded on an EU venue and (ii) traded in a manner that is not non-systematic, ad hoc, irregular, or infrequent. For EU participants to access Swiss exchanges and trading platforms for such securities, Switzerland needed its venues to be recognized as equivalent under MiFIR, unless trading activity was non-systematic, ad hoc, irregular, and infrequent.

After an initial temporary recognition of equivalence, the European Commission allowed equivalence to lapse, citing the lack of progress in negotiations on a comprehensive institutional agreement governing the relationships of the EU with Switzerland. This meant that EU investment firms could no longer satisfy their MiFIR share trading obligation by executing transactions in Swiss equity securities on Swiss exchanges – effectively prohibiting such trading unless specific exemptions applied. A further consequence was that Swiss-EU dual listings were excluded, and Swiss listed shares were no longer eligible as consideration without cash alternative in a cross-border public takeover under EU takeover law.

The Swiss response: protective measures

Expecting the lapse of the equivalence status, the Swiss Federal Council adopted the “Ordinance on the Recognition of Foreign Trading Venues for the Trading of Equity Securities of Companies with Registered Office in Switzerland” (the Ordinance) on 30 November 2018, banning the trading of Swiss equity securities on certain foreign venues. This measure exclusively targeted EU trading venues.

Given that equity securities issued by Swiss companies could thus no longer be traded on regulated markets or trading venues within the EU, the EU share trading obligation under MiFIR Article 23 would no longer apply to Swiss equity securities. This move allowed EU market participants to continue trading Swiss equities on Swiss exchanges and trading platforms without breaching EU regulations. It also applied, if some trading in Swiss equities persisted on EU venues, provided such activity remained non-systematic, ad hoc, irregular, and infrequent.

Trading volume in Swiss equity securities was thereby redirected to Switzerland, ensuring that EU firms could continue trading Swiss equity securities on Swiss exchanges, despite the lack of formal equivalence, thereby maintaining market stability. However, this strategy also had side effects. EU investment firms were limited to Swiss trading venues with sometimes higher average fees. Dual listings where no longer possible. For companies seeking greater visibility and liquidity in Europe, direct trading and thus their presence in EU markets was blocked. It created legal and operational frictions in cross-border mergers and acquisitions. The measure implied a certain fragmentation of the capital markets, as Swiss shares could no longer be traded in both the EU and Switzerland at the same time, affecting price books and trading volumes, potentially reducing efficiency and attractiveness of the Swiss market.

Lifting of protective measures in 2025

In 2024, the European Union amended MiFIR. One of the key changes was the revision of Article 23, which entered into force on 28 March 2024. The amended provision narrows the scope of the share trading obligation to equity instruments bearing an International Securities Identification Number (ISIN) issued by a country within the European Economic Area (EEA). As most Swiss equity instruments do not carry an EEA but a Swiss ISIN (beginning with CH), they are no longer within the scope of the EU share trading obligation under Article 23 MiFIR. This change effectively removed the regulatory barrier that, since the expiry of Switzerland’s equivalence status in 2019, were intended to prevent EU investment firms from trading Swiss equity instruments on Swiss trading venues.

In response to this development, the Swiss Federal Council resolved to repeal its Ordinance. The repeal took effect on 1 May 2025, thereby formally lifting the Swiss protective measures introduced in 2019 and restoring standard cross-border access to Swiss trading venues. As a result, EU firms could resume trades in Swiss equity instruments on EU trading venues.

Tax considerations in cross-border trading

From a tax perspective, the cross-border trading of shares between the EU and Switzerland involves several key considerations namely with respect to Swiss stamp duties and Swiss withholding tax.

When considering the trading of shares, transactions should be carefully assessed from a Swiss stamp duty perspective, particularly in relation to the Swiss securities transfer tax (Umsatzabgabe). The Swiss securities transfer tax is generally imposed when taxable securities, such as shares, are traded with the involvement of a Swiss securities dealer, either as a contracting party or acting as an intermediary, even if the transaction is executed on an EU trading venue. A Swiss securities dealer includes, among others, Swiss banks, brokers, and large holding companies domiciled in Switzerland with participations recorded at a book value exceeding CHF 10 million. The applicable securities transfer tax rates are 0.15% for Swiss domestic securities and 0.30% for non-Swiss securities, calculated on the fair value of the transaction.

This implies that any primary or secondary market transaction involving taxable securities and a Swiss securities dealer should be carefully assessed to determine whether an exemption to the Swiss securities transfer tax is applicable, as the Swiss Stamp Duty Act provides for numerous exemptions. For example, the issuance of new shares by a foreign company on a Swiss stock exchange may be exempt from Swiss securities transfer tax, even where a Swiss securities dealer participates in the transaction as an intermediary, provided the transaction qualifies as a primary market transaction. The availability of this exemption depends on the case specific structure of the case and generally requires confirmation through a tax ruling.

Where a foreign securities trader with a Swiss affiliate (qualifying as a Swiss securities dealer) is involved, it must be ensured that the Swiss affiliate has no role in the transaction, as otherwise its participation can trigger Swiss securities transfer tax. In this context, the Swiss Federal Tax Administration has published clarifications regarding intra-group M&A brokerage.

Furthermore, primary market transactions involving a Swiss company are generally subject to Swiss issuance stamp duty (Emissionsabgabe) at a rate of 1%, with a standard exemption for the first CHF 1 million of nominal share capital issued, including any amount above par value such as share premium.

Eventually, and apart from the Swiss stamp duties aspect, and more from a going concern perspective it should be noted that dividend distributions out of retained earnings by a Swiss company are in principle subject to a 35% Swiss withholding tax (Verrechnungssteuer). It should be noted that Swiss withholding tax is a self-assessment tax, meaning that the Swiss company needs to deduct the tax from the dividend and pay it to the Swiss Federal Tax Administration without a tax bill issued by the latter. Relief in the form of a full or partial refund of Swiss withholding tax may be available under domestic law and, more importantly, also through applicable double taxation agreements (DTTs) or pursuant to Article 9 of the Agreement between the European Union and the Swiss Confederation on the automatic exchange of financial account information to improve international tax compliance (AEOI Agreement CH–EU).

The availability of such relief is subject to a thorough review of beneficial ownership, substance requirements, and the proper filing of the respective forms. In certain constellations and merely in corporate group constellations, the fulfilment of Swiss withholding tax at source by means of a mere notification instead of payment and refund may be granted. The trading venue does not affect the Swiss withholding tax consequences after completion, as the Swiss withholding tax inter alia applies whenever a Swiss company distributes dividends out of retained earnings. However, if the dividends are distributed from qualifying capital contribution reserves (QCCRs) confirmed by the Swiss Federal Tax Administration, those dividends are exempt from Swiss withholding tax, provided they are properly declared.

It is therefore advisable to examine the relevant DTT to evaluate the potential economic benefits of submitting a refund claim. DTTs between Switzerland and relevant EU member states typically provide for a reduced Swiss withholding tax rate often as low as 0% for corporations and 15% for individuals with direct ownership under the condition that the requirements are met.

Equity transactions executed on EU trading venues may in some cases be subject to domestic transaction taxes or duties. However, the main regimes, such as the French Taxe sur les transactions financières (TTF) and the Italian Imposta sulle transazioni finanziarie (ITF), are issuer‑based and therefore, in principle, apply to qualifying French or Italian shares. Comparable issuer‑based levies, such as UK Stamp Duty and Stamp Duty Reserve Tax (SDRT), may also become relevant and require case‑by‑case analysis in stock market transactions, particularly where a company maintains a share register in the United Kingdom. By contrast, Germany does not levy a general transfer tax on the trading of shares, provided the company does not own German real estate.

Different approach: UK - Berne Financial Services Agreement on Trading Venues

The UK-Swiss Berne Financial Services Agreement (BFSA) introduces a regime of mutual regulatory recognition for wholesale financial market activity. One of its practical aims is to ease dual listings and clearing by removing duplicative requirements where each jurisdiction is satisfied with the other’s supervisory outcomes. Unlike EU passporting under MiFID II, the BFSA does not confer an automatic right of access. Instead, it provides a stable and predictable basis for market access through outcome-based recognition coupled with structured cooperation between the UK and Swiss supervisory authorities.  

Specifically, UK venues like the London Stock Exchange can admit Swiss-listed companies using Swiss-approved disclosure documents with only minor jurisdictional add-ons, avoiding a full UK prospectus review. Similarly, UK firms seeking admission to trading in Switzerland benefit from simplified procedures under the Swiss Financial Services Act (FinSA), rather than being required to restart the approval process from scratch. These provisions apply solely to wholesale listings for professional clients and eligible counterparties.

The scope of these arrangements is deliberately confined to wholesale markets, meaning transactions involving professional clients and eligible counterparties. In practice, wholesale listings in Switzerland remain relatively uncommon and are largely confined to venues such as BX Swiss. Retail listings remain outside the BFSA’s scope and must comply fully with host-country rules, though Swiss law generally recognizes UK-approved prospectuses (art. 54 sec. 3 FinSA).

Best practices for Swiss securities dealers

Securities dealers are required under Swiss law to exercise due diligence when selecting trading venues, with a view to achieving the best possible result for their clients, taking into account price, costs, speed, likelihood of execution, and other relevant factors. The resumption of trading in Swiss shares on EU venues following the lifting of EU‑related restrictions necessitates a review and adaptation of internal procedures.

Dealers should now systematically compare domestic and EU trading venues before executing trades in Swiss equities, considering:

  • Execution price and total transaction costs across venues;
  • Liquidity and market depth;
  • Speed and likelihood of execution;
  • Regulatory and operational considerations, including compliance with FINMA and EU rules.

Documenting these comparisons and the rationale for venue choice is critical to demonstrate adherence to best practice obligations. Firms are encouraged to update their internal policies and controls to ensure that trading decisions reflect this expanded scope of venue options, while maintaining compliance with applicable Swiss and EU regulatory requirements.

Will a revision of Swiss law promote stock exchange equivalence?

As part of Switzerland’s ongoing efforts to bring its stock exchange framework closer to EU standards, a draft revision of the Financial Market Infrastructure Act (FMIA) proposes a significant shift in regulatory responsibility. Under the proposal, key rules on ad hoc publicity and the disclosure of management transactions would no longer be governed primarily by stock exchange self-regulation but would instead be integrated into federal law and placed under the supervision of FINMA.

FINMA would enforce compliance, replacing the current stock exchange enforcement regime. If enacted, the revision would make disclosure obligations binding under statutory law, subject directors and management to clearer legal accountability, and standardise enforcement across Swiss‑listed companies.

From a cross-border perspective, such a revision would likely strengthen the perceived equivalence of the Swiss regulatory regime, particularly vis-à-vis the EU, although formal equivalence determinations ultimately remain a political decision. Critics of the proposal point out that the existing self-regulatory model has generally been regarded as flexible, pragmatic and efficient, allowing issues to be addressed swiftly and in a market-oriented manner. In their view, replacing this system with a more centralised, supervisory regime risks adding rigidity and could undermine the competitiveness of the Swiss capital markets. The legislative discussions are being followed with great attention.  

Conclusion

The restoration of practical access to Swiss trading venues for EU actors – however without formal equivalence status – represents a pragmatic shift in market infrastructure regulation. While the political question of formal recognition remains unresolved, the amended EU rules and Switzerland’s reciprocal withdrawal of countermeasures restored a workable status quo. In 2026, Swiss equity markets should normalise following the lifting of EU-related trading restrictions. Some redistribution of volumes across European venues is likely, but SIX is expected to remain the primary venue for Swiss equities due to its liquidity, infrastructure and regulatory stability.

The new development demands renewed focus on best execution policies, cross-border tax structuring, and regulatory risk analysis. It also offers an opportunity for Swiss and European law firms to collaborate more fluidly on M&A, ECM and DCM mandates involving Swiss issuers. Continued regulatory fragmentation between the EU and the UK will influence cross-border trading strategies, with bilateral arrangements such as the BFSA gaining practical importance.

For more information on the BFSA, please read our article here: The UK-Swiss Berne Financial Services Agreement: Convergence of two major financial markets