From July 1, Swiss securities will be banned from trading on the European Union (EU) stock market after negotiations on a new bilateral institutional framework between the two the party collapsed.

This is an unprecedented step for the EU. Earlier, the European Commission announced there was no reason to extend the transaction after the end of June - the deadline for the two parties to reach an agreement. Earlier, in 2017, the EU used the stock market issue to put pressure on Switzerland.

The Swiss government and EU officials were unable to break the deadlock after years of negotiating a new institutional framework agreement to replace about 120 bilateral agreements to regulate relations, especially economic relations. Internationally, between the two sides for decades. The main questions are in the fields of agriculture, immigration and civil aviation.

The draft agreement was met with opposition from both left and right sides in Switzerland. The Swiss government believes that the EU agreement framework raises the issue of labor protection policies for workers in Switzerland (which is higher than the EU average), as well as major subsidy issues. funding should be discussed in depth before it can be approved.

It is estimated that about one-third of transactions on Swiss stocks will be affected by the ban, most of which are related to SIX’s operation - the unit operating the Swiss stock market. Earlier in the week, Switzerland also announced it would take retaliation measures commensurate with the EU. Switzerland is currently the 4th largest stock market in Europe.

Accordingly, Switzerland will ban business registration companies in the country that have transactions with the EU, EU securities brokers will have to be licensed by the Swiss government in Switzerland. SIX spokesman voiced support for the Swiss government’s measure.

Switzerland’s response will likely cause long-term problems, although the problem may now be controlled, especially reducing the attraction of the capital market in Switzerland.