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SIX Swiss Exchange

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SIX Swiss Exchange
TypeStock Exchange
LocationZürich,Switzerland
Coordinates47°22′28″N08°32′28″E/ 47.37444°N 8.54111°E/47.37444; 8.54111
FoundedGeneva: 1850(1850)
Basel: 1866
Zürich: 1873
Current form: 1993
OwnerSIX Group
Key peopleThomas Zeeb
(Head Swiss Exchange)
Jos Dijsselhof
(CEOSIX Group)
Thomas Wellauer
(ChairmanSIX Group)
CurrencySwiss franc
Market capCHF 1.6 trillion (2018)[1]
IndicesSMI,SPI,SLI,SBI,SARON
Websitewww.six-group.com

SIX Swiss Exchange(formerlySWX Swiss Exchange), based inZürich,isSwitzerland's principalstock exchange(the other beingBX Swiss). SIX Swiss Exchange also trades othersecuritiessuch as Swissgovernment bondsandderivativessuch asstock options.

SIX Swiss Exchange is completely owned bySIX Group,an unlisted public limited company itself controlled by 122 banks or financial institutions.[2]

The exchange in its current state was founded in 1993 by merging theGeneva Stock Exchange,theBasel Stock Exchangeand theZürichstock exchange into theVerein Schweizerische Effektenbörse(German for "Swiss Securities Exchanges Association" ), publicly known in English asSwiss Exchange.[3]The newly created association took over trading in 1995. It was the first stock exchange in the world to incorporate a fully automated trading, clearing and settlement system.

The association was renamed to SWX Swiss Exchange in 1999.[4]In 2002, the association was changed to apublic limited companycalled SWX Swiss Exchange AG. In July 2004, it rejected a merger proposal fromDeutsche Börse,which analysts anticipated as profitable for many small companies listed on SWX Swiss Exchange. In 2008, SWX Swiss Exchange merged with SIS Group andTelekursinto the newSIX Group,and was renamed as SIX Swiss Exchange, which is still its name as of 2020.

SIX Swiss Exchange maintains several major indices. The most known index is the SMI, orSwiss Market Index,which consists of the 20 largest and most liquid companies of the SPI. The SPI, orSwiss Performance Index,contains more than 200 companies listed on the exchange that meet requirements. The SLI, orSwiss Leader Index,is a capped index with some of the largest 30 companies. The SBI, orSwiss Bond Index,tracks obligations emitted inSwiss francs.Themarket capitalizationof all companies listed at SIX Swiss Exchange amounted in 2018 to 1.6 trillion Swiss francs, making it one of the top exchanges in the world by capitalization.[5]

On 23 August 2023, the company formedEuroCTPas a joint venture with 13 other bourses, in an effort to provide aconsolidated tapefor theEuropean Union,as part of theCapital Markets Unionproposed by theEuropean Commission.

History

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First Swiss exchanges

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The first exchanges in Switzerland were created locally in major Swiss cities throughout Switzerland, with the authorization of theCantonalauthorities.Genevapaved the way in the year 1850, when theSociété des agents de change réunis(English:United Brokers Association) was founded. Itstrading floorwas opened in 1855 and approved by theGrand Council of Genevain 1856.[6]TheBasler Börsefollowed in 1866 or 1876 (sources disagree) inBasel,as well as another one inZürichin 1873.[6]TheBerne exchange,which still exists today, was founded in 1884. Smaller exchanges were also created inLausannein 1873, inSt. Gallenin 1887 and inNeuchâtelin 1905.[4][6]The exchanges were subject by the Cantons to avalue added tax.[6]

During theFirst World War,all Swiss exchanges were closed, with the exception ofbondtrading in the Geneva exchange. Thedepression of 1920–21was followed by a bull market in the 1920s, during which a new exchange building (alte Börse,German for "old exchange" ) was constructed in Zürich at Bleicherweg 5, nearParadeplatz.The building is still standing, but no longer used as an exchange.

After theGreat Depressionof the 1930s, a federal banking law was introduced. This law is still in effect today and, in its form as of 2020, requires permission by theFINMAto do banking activities, as well as due diligence andbanking secrecy.An exchange law was also discussed, but not introduced. Finally, Swiss exchanges were required to unite under a securities exchange association in order to set up a registration office, so that theSwiss National Bankcould have the desired influence.

Post-war era

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After theSecond World War,banking fees for trades on exchanges were unified in a broker conference. In the middle of the 1950s, the revenues of the exchanges reached new highs as in times before or between the wars until 1929. This development continued until theKennedy Slide of 1962,which was triggered by measures against the economic slowdown, the New York crash, and theCuban Missile Crisis.

Following thederegulationand the termination of theBretton Woods System(fixed exchange rates) by theUnited States,in the 1970s, a fundamental transformation of theeconomyand of the financial landscape started, which is still ongoing today. Fluctuating exchange rates carried new risks for the economy and a need forhedgingsolutions arose. Financederivativeswere introduced as a response to this need and in 1973, theChicago Board Options Exchangewas created as an exchange that only handles derivatives. With theoil crisisof 1974, the economy went through the biggest after-war recession since 1931. In Switzerland, the oil shock led to such a rush on investment money that it was considered to close the exchanges.

New economy

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TheGeneva Stock Exchange,theBasel Stock Exchangeand the Zürich stock exchange merged into SWX Swiss Exchange in 1993.[3]On 16 August 1995, the closing bells rang for the last time on the trading floors, ending an era spanning more than a century. They were superseded with the world's first automated trading,clearingandsettlementsystem.

After the international financial markets recovered from the1997/1998 Asian crisisand the1998 Russian crisis,there was a period of two years of lasting bull market from October 1998. This bull market was mainly driven by thenew economyboom and transition of this time. However, the boom was more limited on Swiss stock indices, since they are dominated by pharmaceutical, food and financial values, while Internet companies and technology companies play only a secondary role. Hence, it was only in May 2000 that theSwiss Performance Indexcrossed again the peak of 5,237 points that it had reached before the Russian crisis. It reached its then all-time high of 5,770 points on 23 August 2000. The bursting of thedot-com bubblesent stock prices down worldwide, and did not spare Swiss stock indices. The SPI entered a bear market. It had lost more than 20% from its previous peak by 22 March 2001, on which day it reached a temporary bottom.

After a short recovery phase, the SPI started to erode continuously from May 2001. The9/11 attacksaccelerated this evolution, started with the bursting of the dot-com bubble, further. The SPI reached its bottom of 2,603 points one and a half years later, on 12 March 2003, at the peak of theSARS-epidemicand theIraq war.

SIX Group

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In May 2007, the SWX Group, the SIS Group andTelekurs Groupannounced their merger to a newholdingcalled Swiss Financial Market Services AG.[7]The merger was official in 2008 and the new company was renamed toSIX Group AG.[8]SWX Swiss Exchange was renamed to SIX Swiss Exchange in the same year.[9][10]

Subsidiaries, acquisitions and joint ventures

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Eurex

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From 1998 to 2012, SIX Swiss Exchange owned 15% ofEurex,the world's second largestfuturesand derivatives exchange, after theChicago Mercantile Exchange,along with its German partnerDeutsche Börse(85%). Deutsche Börse purchased the 15% ownership from SIX Swiss Exchange in 2012,[11]becoming its sole owner.

SWX Europe

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SWX Swiss Exchange, as was its new name since 1999,[4]acquired the stock exchange platform Tradepoint, renamed asVirt-x,[12]for the trading of 32 Swissbluechipstocks, regulated by the BritishFinancial Services Authority.[13]The new platform was opened on 25 June 2001.[14]The main goals were on the one hand to build a pan-European exchange and on the other hand to mitigate the migration of the trading volume onSMI stocksto theLondon exchange.[15]

The listed companies were offered the choice between two market segments for SMI stocks: The EU-regulated market segment and the UK-exchange-regulated market segment. Both segments were subject to the regulations of the British Financial Services Authority, and the EU segment was in addition subject to EU regulations.[16]

Virt-x was renamed to SWX Europe in 2008.[17]SWX Europe came to a halt in 2009 and the trading was transferred to SIX Swiss Exchange.[18]

International Securities Exchange

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On 30 April 2007, SWX Swiss exchange acquired, jointly withDeutsche Börse,the USoptionexchangeISE.With the acquisition ofInternational Securities Exchange Holding(ISE), one of the largest trading platforms for financederivativesemerged. The price for ISE was $2.8 billion and it was financed throughEurex,[19]which was then owned 85% by Deutsche Börse and 15% by SWX Swiss Exchange. The revenue of ISE was about $178 million in 2006, and the profit around $55 million. The ISE remains independent and keeps its structure andbranding.

Scoach

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On 1 January 2007, SWX Swiss Exchange and Deutsche Börse jointly started and managed an exchange for structured products, ajoint venturecalledScoach.[20]

In February 2013, Scoach was split into Scoach Europa AG, fully owned by Deutsche Börse, and Scoach Schweiz AG, fully owned by SIX Swiss Exchange.[21]Scoach Schweiz AG was renamed to SIX Structured Products in November 2013.[22]

AsiaNext

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In 2021, SIX Group established AsiaNext, a digital asset exchange for institutions, as a joint venture withSBI Digital Asset Holdings.In 2023, AsiaNext has received a license as a Recognized Market Operator (RMO) by theMonetary Authority of Singapore.[23]

Headquarters

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Headquarters were moved to Selnaustrasse in 2002. In 2017, they moved again to the Hard Turm Park inZürich-West.[24]

Technological advances

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For the first time in the world, in 1962, an exchange TV broadcast was introduced in Basel and Zürich. Banks started to usecomputers,while exchanges followed more hesitantly. In 1964,Telekurswas mandated by the Zürich stock exchange to investigate how computer technologies could be used on the exchange. Only in the 1980s did computers finally find their way into exchanges. On 8 December 1995, an advanced electronic system for the processing of foreign stock in the domestic exchange market was introduced, on 2 August 1996 that of Swiss stock and options. Finally, on 16 August 1996, bonds were also electronically traded and thetrading floorwas discontinued.[14]

On 3 December 2020, SIX Swiss Exchange, in collaboration with theBank for International SettlementsandSwiss National Bank,completed a wholesalecentral bank digital currencyproof-of-concept on a distributeddigital assetplatform.[25]

Other services

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SIX Swiss Exchange is part of theSIX Group,which provides a number of otherfinancial market infrastructureservices in Switzerland. These includeclearing,acting ascentral counterparty,custody services,market dataservices,share registry,payment services, and running thereal-time gross settlement(RTGS) system on behalf of the central bank of Switzerland, theSwiss National Bank.[26]

References

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  1. ^[1]Archived8 December 2015 at theWayback MachineApril 2015
  2. ^Annual reportArchived22 October 2021 at theWayback Machine2019.
  3. ^abSIX Swiss ExchangeArchived8 August 2020 at theWayback Machine.Interactive brokers. Retrieved 15 April 2020.
  4. ^abcDie Anfänge der Schweizer BörsenArchived7 August 2020 at theWayback Machine.Neue Zürcher Zeitung. 8 December 2015.]
  5. ^The Worlds Stock Exchanges by Market CapArchived7 October 2018 at theWayback MachineMarch 2018.
  6. ^abcdElisabeth Meyerhans (19 August 2004)."Historisches Lexikon des Schweiz".Archivedfrom the original on 7 August 2020.Retrieved8 April2020.
  7. ^"SWX Group, SIS Group and Telekurs Group intend to merge"(PDF).SIX Group.Archived(PDF)from the original on 7 August 2020.Retrieved3 May2020.
  8. ^"Finanzplatzholding heisst ab sofort SIX".Neue Zürcher Zeitung(in German). 30 September 2008.Archivedfrom the original on 7 August 2020.Retrieved3 May2020.
  9. ^"SWX Swiss Exchange becomes SIX Swiss Exchange".Finextra Research.30 September 2008.Archivedfrom the original on 11 January 2023.Retrieved3 May2020.
  10. ^SWX Swiss Exchange becomes SIX Swiss Exchange.30 September 2008.Archived2008-11-20 at theWayback Machine
  11. ^"Deutsche Boerse buys Eurex from SIX Group".Reuters.7 June 2011.Archivedfrom the original on 7 August 2020.Retrieved3 May2020.
  12. ^"Tradepoint Merges With SWX to Form Virt-x".WatersTechnology.com.24 July 2000.Archivedfrom the original on 11 January 2023.Retrieved1 May2020.
  13. ^Feller*, Von Urs (27 November 2008)."Fragwürdiger Rückzug der SIX aus London".Neue Zürcher Zeitung(in German).Archivedfrom the original on 7 August 2020.Retrieved1 May2020.
  14. ^ab"Milestones".SIX Swiss Exchange history.Archived fromthe originalon 16 June 2010.
  15. ^"Gewagter Rückzug der Schweizer Börse aus London".Neue Zürcher Zeitung(in German). 12 November 2008.Archivedfrom the original on 11 January 2023.Retrieved1 May2020.
  16. ^"SMI-Titel bevorzugen in London EU-Segment".Neue Zürcher Zeitung(in German). 24 May 2008.Archivedfrom the original on 11 January 2023.Retrieved1 May2020.
  17. ^virt-x changes its name to SWX Europe.3 March 2008, retrieved 5 July 2008.[dead link]
  18. ^"Closure of SWX Europe finalised - The TRADE".thetradenews.com.Archivedfrom the original on 7 August 2020.Retrieved3 May2020.
  19. ^AP (30 April 2007)."Deutsche Boerse Agrees to Acquire ISE Market for $2.8 Billion".cnbc.com.Archivedfrom the original on 8 August 2020.Retrieved3 May2020.
  20. ^"SIX Zurich. Trading hours & market holidays".OpenMarket.Retrieved9 April2023.
  21. ^"Joint Venture Scoach steht vor Beendigung"(PDF).Archived fromthe original(PDF)on 9 November 2013.
  22. ^"SIX strengthens market for structured products in Switzerland"(PDF).SIX Group.Archived(PDF)from the original on 7 August 2020.Retrieved3 May2020.
  23. ^"SIX Group's Digital Asset JV Obtains MAS License".Finews.7 September 2023.
  24. ^Annual ReportArchived7 August 2020 at theWayback MachineSWX Swiss Exchange, 2002.
  25. ^"Synchronicity will be key to CBDC and cross-border payments".Euromoney.10 December 2020.Archivedfrom the original on 11 December 2020.Retrieved11 December2020.
  26. ^"Swiss Interbank Clearing (SIC) - Milestones".Swiss National Bank.Archived fromthe originalon 7 November 2007.Retrieved4 June2011.
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