Stock market equivalence

Stock market equivalence is granted by the European Union to those countries whose stock markets are deemed to be 'equivalent' to those of the EU countries. On 3 January 2018, the EU implemented the "Markets in Financial Instruments Directive II" (colloquially known as "MiFID II") which required all European investment firms & traders to trade the shares of a company listed in the EU on a stock exchange within the EU or an equivalent third country exchange.[1] In order to gain equivalence, the trading venues of the concerned country should have a high level of investor protection and sound mechanisms to deal with insider trading. The main purpose of this measure is to protect the interests of investors based in the EU. Analysts have called it a pioneer in financial regulation with the potential to restructure the global financial system.[citation needed] As of 17 November 2023, only three jurisdictions had been granted equivalence: the United States of America, Australia and Hong Kong.[2] Switzerland too was granted equivalence, but only temporarily, and the EU announced in early May 2019 that it would not renew equivalence for Switzerland after 1 July 2019. This was part of the wider Swiss-EU trade dispute.[3]

  1. ^ Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 Text with EEA relevance, 2014-06-12, retrieved 2019-09-14
  2. ^ "Overview table - Equivalence/adequacy decisions taken by the European Commission" (PDF). European Commission. 2023-11-17. Retrieved 2024-09-22.
  3. ^ Walker, Andrew (2019-07-02). "EU-Swiss share trading row: What does it mean?". Retrieved 2019-09-14.