The Swiss exchange-traded funds industry enjoyed a strong 2017 with Zurich-based SIX Swiss Exchange reporting record levels of turnover and listings on its ETF segment.
Total traded volume for ETFs on Swiss exchange during 2017 was 12.2% higher than the previous record set in 2016.
ETF traded volume for the year came in at CHF 116.4 billion – a new record high, and up 12.2% on the previous year.
The number of trades was also up, by 6.0% to 1,019,294, despite fewer trading days in the year.
New listings on the ETF segment also broke previous records, with issuers listing a total of 144 new ETFs in 2017. Taking the total number of ETFs on the exchange to 1,278. There are now 22 issuers with products on the exchange.
There were interesting developments in the index space too, as SIX implemented a rule change on the SMI, or Swiss Market Index, which brought the blue-chip index into line with the ESMA-UCITS directive. The rule change means that individual securities are capped at 18% of the index, which permits it to be used as a reference index for UCITS funds, including ETFs.
The SMI captures between 80% and 85% of the total capitalisation of the Swiss equity market and is free-float-adjusted.
The exchange also noted its preparedness for the introduction of financial market regulation MiFID II which was rolled out on 3 January 2017. MiFID II is expected to provide a boost to the growth of the European ETF industry through two main channels: By imposing tighter restrictions on commissions paid by asset managers to fund distributors in return for selling their products (ETFs do not pay fund distribution commissions and are likely to experience greater demand); and introducing new trade reporting standards which will shed a light on previously unreported over-the-counter transactions. This move will likely lead to greater price discovery and lower trading costs, two factors that will further spur greater adoption of ETFs.
Christoph Landis, division CEO SIX Swiss Exchange, commented, “We have systematically invested in the ongoing development of our trading platform. As a result, SIX Swiss Exchange now fulfils the requirements of the EU’s MiFID ll Directive, thus meeting the conditions for recognition by the EU as an equivalent third-country trading venue.”