BRUSSELS (Reuters) - The European Union is set to grant Switzerland's stock exchanges access to the bloc's internal market for one year, EU sources said, in a move aimed at putting pressure on Bern to clinch an overall deal on its relations with the EU.
The EU states will vote on Wednesday on a proposal by the executive European Commission to recognise shares trading on the SIX Swiss Exchange and BX Swiss as equivalent to exchanges based in the 28-country bloc.
If they back the proposal, as EU officials expect, the Commission will temporarily allow EU investors to access the Swiss exchanges and vice-versa. That will avoid disruption after new MiFID II market rules come into force on Jan. 3.
The Commission had initially proposed the open-ended adoption of equivalence for the Swiss exchanges, in line with a deal on U.S. trading venues, documents seen by Reuters showed.
But Switzerland's reluctance to sign an overall deal on its relations with the EU, of which it is a close partner but not a member, pushed the Commission to review the offer on trading venues, EU sources said.
"Recognising equivalence for one year makes a lot of sense," a Commission official said, adding that it would avoid disruption and allow for a general deal by the end of next year on Switzerland's access to the EU market.
Interviewed by Swiss television SRF, Swiss Foreign Minister Ignazio Cassis said he told his French counterpart during a visit to Paris that Switzerland was not satisfied with this temporary equivalence.
"I said clearly that we were unhappy with this and that we don't accept linking this question of financial equivalence to that of market access, the so-called institutional agreement. This link was made when (Jean-Claude) Juncker visited Switzerland and the Swiss government rejects it," Cassis said.
SRF quoted Cassis as saying that the Swiss government could review its decision to make "cohesion payments" of more than one billion Swiss francs ($1.01 billion) to the EU.
The so-called "institutional agreement" under negotiation between Bern and Brussels would give Switzerland easier access to the EU's single market of more than 400 million people. In exchange, Switzerland would more closely align with EU rules and make broader commitments to the bloc.
($1 = 0.9853 Swiss francs)
(Reporting by Francesco Guarascio, additional reporting by Silke Koltrowitz in Zurich, editing by Catherine Evans, Larry King)
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