[ I N - D E P T H
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“We saw a real improvement in
terms of liquidity, and trading on
one exchange is making things a lot
easier for us.”
ERIC CHAMPENOIS, HEAD OF TRADING,
UNIGESTION ASSET MANAGEMENT
who need to cross the spread (as
all other lit options have basically
disappeared), thus further driving
away the price on the main lit
market.”
SIX Swiss Exchange, however,
tells a different story.
The new landscape
Immediately after the non-equiv-
alence decision, trading in Swiss
stocks moved from the EU-based
venues and multilateral trading
facilities (MTFs) to the SIX pri-
mary exchange and its dark venue,
SwissAtMid. SIX Swiss Exchange
gathered statistics from indepen-
dent data providers, including big
xyt and IHS Markit, and found
that SIs and OTC did see marginal
increases in activity, but the pri-
mary exchange picked up the bulk
of activity.
“I don’t think I’ve ever been so
popular in my life to be honest,
with the amount of phone calls
I received immediately after
the decision,” says Tony Shaw,
executive director for London at
SIX Securities and Exchanges. “It
was a surprise for some market
participants and certain aspects,
such as the dual-listed securities,
did cause a few headaches for
some. But overall, if you speak to
the market now, they say that the
market is operating efficiently.”
Looking at the percentage of
average daily turnover in Swiss eq-
uities, the statistics show that vol-
umes in SIs increased from 22% of
market share in June prior to the
ban, to 25.6% the following month,
while OTC activity increased over
the same period from 20.8% to
23.3%. The SIX primary exchange
swept up the remaining volumes
from MTFs, with a significant
increase in share from 37% in June
to 50.9% the following month.
By September, the data from SIX
Swiss Exchange shows a clear
shift in market structure as the
fallout from the non-equivalence
decision becomes more apparent,
with SIs, OTC and the SIX pri-
mary exchange making up 23.9%,
23.3% and 52.7% of the average
daily turnover in Swiss equities
respectively.
Overall, however, trading vol-
umes in Swiss equities were down
in the months of July and August,
before activity picked up again in
September. The decline during
July and August could be attribut-
able to the summer period when
volumes are generally lower.
SIX Swiss Exchange demon-
strates through data from IHS
Markit and its own database that
relative spreads in blue chip and
small and mid-cap stocks did
widen slightly in August. Come
September, however, spreads
narrowed significantly. Despite
the findings of Virtu Financial
that spreads in Swiss equities had
widened considerably in the in the
wake of the non-equivalence, the
data reveals that relative spread
in blue chips narrowed from 4.0
bps in June, to 3.6 bps in Septem-
ber. Similarly, relative spread for
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