“The Stock Exchange Is the Ideal Marketplace for Bringing Together Buyers and Sellers of Securities.”

In a conversation with Werner Vogt, member of the board of trustees of the Swiss Finance Museum and former media spokesperson of SIX, the former Head of the Zurich Stock Exchange, Dr. Richard T. Meier, and the current Head SIX Swiss Exchange, Christian Reuss, discuss differences and similarities in trading, settlement and regulation.

“Concerning the core functions of a stock exchange, not that much has changed over the centuries,” as Christian Reuss explains at the beginning of the conversation. Indeed, creating the framework conditions to enable growth financing by raising capital, as well as ensuring price discovery by bringing buyers and sellers together have always constituted the added value that exchanges bring to a successful economy.

Technology as a Means to an End

Although technology has changed a great deal over time – in Switzerland already in 1995, when SIX Swiss Exchange pioneered the introduction of a fully electronic value chain for trading and post-trading –, and with it the day-to-day work of traders, Christan Reuss points out that what really matters at the core is still price formation through supply and demand: “Since trading on the Swiss stock exchange became electronic, it has been possible to trade more and for longer. But it’s important to keep in mind that technology is always a means to an end.”

Globally, SIX Swiss Exchange is also a leader in terms of reliability. “The matcher, where buy and sell orders come together, is the heart of the exchange and must be very stable,” Christian Reuss emphasizes. The number one rule, he says, is that orderly trading must be possible – especially in very uncertain times. Only then can investors react actively to news that created said uncertainty. Dr. Richard T. Meier agrees that stock exchanges should remain open whenever possible.

The Quality of Price Formation

While in principle, SIX Swiss Exchange welcomes competition, the fragmentation of trading the same securities on different trading venues has also negative aspects. Because it is no longer ensured that all information is combined in one place, the quality of price formation suffers. “The most meaningful price is formed where the most participants with different trading strategies, perspectives and analyses come together – because this results in a price that contains all this information,” concludes Christian Reuss. 

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