Two decades after becoming one of the first stock exchanges in Europe to facilitate the listing and trading of ETFs (exchange traded funds), the Swiss Stock Exchange has solidified its position as one of the top three ETF trading venues by volume in Europe. In the first eight months of 2020, ETF trading turnover on the Swiss Stock Exchange reached CHF 80 billion, while the number of transactions grew by 62% year-on-year – an exponential increase - hitting 1.15 million. Despite the Covid-19 uncertainty, five actively managed ETFs and 81 passive ETFs have listed on the Exchange since the beginning of 2020. As a result, there are currently more than 1,600 ETFs listed on the Swiss Stock Exchange. Moreover, the number of ETF providers on the Exchange also swelled to 28, with four new joiners this year alone, including Credit Suisse Asset Management; HANetf; Rize ETF and PIMCO.
The Swiss Success Story
Switzerland’s meteoric rise as the listing destination of choice for ETFs has been driven by a number of positive headwinds. During the early stages of the ETF market’s development, the Swiss Stock Exchange was incredibly proactive in engaging with the country’s supervisory body, FINMA, on regulation. Furthermore, it has also played a crucial role in educating investors about the virtues of ETFs through thought leadership campaigns and widely attended industry events. The Exchange’s commitment to innovation has also helped accelerate the operational process for ETF listings. For instance, the Swiss Stock Exchange was the first venue to introduce electronic trading – including settlement – and has continuously invested in premium technology. Through innovation and frequent dialogue with investors, issuers and regulators, the Swiss Stock Exchange has been instrumental in turning Switzerland into a leading ETF hub and listing jurisdiction.
Keep on Delivering
Central to the Exchange’s success has been its relentless pursuit of innovation and the enlargement of the product portfolio. The Exchange has demonstrated remarkable flexibility, by supporting the listing of new ETF strategies which give investors exposure to diverse themes such as ESG (environment, social, governance) or medicinal marijuana, and by adding new currencies in which ETFs can be listed, allowing investors to trade them in the ideal currency for them. Additionally, the Swiss Stock Exchange continues to augment its value to customers through new services. In late 2020, the Exchange will launch “Quote-on-Demand” (QOD), a new service that offers automatic processing of ordinary order book trading together with the functions of an RFQ (request for quote) platform, thereby helping to guarantee best execution. Through its agility and best in class technology, the Swiss Stock Exchange looks set to support growth across the country’s ETF industry for the next twenty years and beyond.