Finding Is Better Than Seeking

Brexit has started to transform the European equities market structure, and the Swiss Stock Exchange has been directly affected: on 3 February 2021, trading in Swiss shares was resumed on UK-based MTFs, ending the 19-month deadlock when they could only be traded on their home market.

This period of undesired non-competition allowed the Swiss Stock Exchange to gather some unique insights regarding liquidity consolidation and fragmentation. In the following interview, Tony Shaw, Executive Director London Office and Head Sales UK & Ireland at the Swiss Stock Exchange, provides a preview on the findings he’ll share with the TradeTech audience during his panel on 27 April 2021 (at 1.05pm CET). Register here

Dear Tony, you’ll be discussing the topic “Accessing liquidity in a post Brexit world”. What are the aspects that will be examined?
The aim is to discuss how market participants can navigate the new post-Brexit equities landscape in Europe, including opportunities and challenges in sourcing liquidity in this new environment. Key questions are how to best leverage venue data to enhance routing performance and venue selection, and also to develop future trading strategies accordingly.

Brexit has brought back competition in Swiss shares. How has the Swiss Stock Exchange prepared for this moment?
We have always been in favour of competition and never changed our attitude or approach. So you might say we haven’t prepared for an exact moment – because we’d have been ready at any point over these 19 months for competition to return. Throughout this period, we kept innovating and introducing new services to make trading on our market more efficient and finding liquidity easier for our participants.

Ever since the non-equivalence became an issue, liquidity has shifted to and from the Swiss Stock Exchange. Looking back, which observations are relevant for the future?
Usually when uncertainty peaks, we tend to see a flight to the primaries. So one might argue that even without the non-equivalency issue, we’d have seen a lot of liquidity shifting to our market last year – and I think this pattern will remain true in future crises, because we are the main market where the reference price is defined and where the largest liquidity provides the biggest certainty of execution. That said, year-on-year comparisons will have to factor in that March 2020 in particular saw unprecedented volatility and volumes.

For a more detailed analysis how the surge in trading activity across Europe in H1 2020 has manifested itself in terms of the impact on liquidity, spreads and depth across different venues I can recommend one of our Trading InfoSnack articles. And I’m looking forward to share more observations about overall volumes, spreads, the depth of liquidity at the touch as well as developments in non-displayed and block trading during the panel at TradeTech.

You mentioned innovation: what were the latest features introduced on the Swiss Stock Exchange, and what’s in the pipeline?
Over the last twelve months, we launched Trading-at-Last and Swiss EBBO for Equities, and we added a new route from London to Stockholm to our Microwave network – to name a few. In 2021 we’re aiming at expanding this network further, introduce Conditional Block Orders, take our Deal Pool platform for Bonds to the next level – and of course we expect the launch of SDX, the SIX Digital Exchange (pending regulatory approvals). And these are just the main enhancements – so expect more news from the Swiss Stock Exchange over the course of the year.

• The Hallmarks of a Great Exchange
• Swiss-Made. World-Class: It’s All in the Quality.
• Embracing Competition