From the ring to the screen

SOFFEX and the Swiss Exchange

The transformation of the Swiss market from ring to screen has been described in Part F of this book, so that a summary suffices here. In 1988 the Swiss Options and Financial Futures Exchange, SOFFEX, began operations as a fully electronic exchange without a trading floor, integrating trading and clearing in one system. The Swiss Market Index was created on 30 June 1988 with a base of 1,500 points to provide an underlying for index derivatives.¹ SOFFEX later licensed its system to the Deutsche Terminbörse. In 1998 the two derivatives exchanges merged to form Eurex, which for many years was jointly owned by the Swiss exchange and Deutsche Börse.

The electronic model soon reached the stock exchange. Having moved in 1991 into a new building on the Selnaustrasse, which was designed with far less space for ring trading than the old hall, the Zurich exchange joined those of Basel and Geneva in 1995 to form the SWX Swiss Exchange.² Electronic trading began for foreign shares on 8 December 1995 and for Swiss shares and options on 2 August 1996. On 15 August 1996 the traders rang the bell of the Zurich ring for the last time, closing an era that had lasted more than a century. The smaller exchanges of Bern, Lausanne, Neuchâtel and St. Gallen had already ended their ring trading in 1991.³

The consequences for Zurich were considerable. The integration of all Swiss trading into a single electronic system based in Zurich ended the rivalry among the cantonal exchanges that Part D has traced back to the nineteenth century. Geneva and Basel lost their exchanges as separate institutions, while Zurich gained the seat of the national exchange, its technology, its staff and, above all, the concentration of trading desks that followed. The Swiss Finance Museum describes the change as a paradigm shift that removed the need for physical presence at the ring and led to a large increase in turnover and liquidity.⁴

The federal Stock Exchange Act of 1995

Until the 1990s, stock exchanges in Switzerland were governed by cantonal law. The Zurich statutes of 1883, 1896 and 1912 had created a model in which a private association operated the market under cantonal licence, with the canton providing the premises and publishing official prices. Although this model had served for a century, it could not govern a national electronic exchange and offered no answer to the questions that the internationalisation of the market raised: equal treatment of investors, transparency of shareholdings, the regulation of takeovers and the prevention of market abuse.

The Federal Act on Stock Exchanges and Securities Trading (Stock Exchange Act, BEHG) of 24 March 1995 supplied that answer. Its stated purpose was to create the conditions for the functioning of the securities markets and to ensure transparency and equal treatment for investors. The Act entered into force on 1 February 1997, while its chapters on the disclosure of shareholdings and on public takeover offers followed on 1 January 1998.⁵ The Historical Dictionary accordingly dates the replacement of the cantonal exchange laws by federal law to 1997.⁶

The BEHG retained the Swiss tradition of self-regulation. It required an exchange to have an operational, administrative and supervisory organisation appropriate to its activities and left it to the exchange to issue its own rules on trading, admission and listing, subject to the approval of the federal supervisory authority, at that time the Federal Banking Commission. It introduced a licensing regime for securities dealers, a duty to disclose significant shareholdings once certain thresholds of voting rights were crossed, as well as a mandatory offer once an acquirer exceeded one third of the voting rights of a listed company, with the possibility for companies to raise the threshold to 49 per cent or to exclude the obligation altogether in their articles of association.⁷ These three pillars, namely self-regulation of listing, disclosure of shareholdings and the mandatory bid, survive in today’s law almost unchanged. The Takeover Board, the specialised authority for public offers, was also created under the BEHG and has its seat in Zurich.⁸

The prohibition of insider dealing, by contrast, was older than the BEHG. It had been introduced into the Swiss Criminal Code in 1988 as Article 161, partly under American pressure after several insider cases in which Swiss bank secrecy had obstructed investigations by the United States Securities and Exchange Commission. Price manipulation followed as a separate offence under Article 161bis of the Criminal Code in 1997.⁹ The history of these provisions is a reminder that Swiss capital market law has often developed in response to foreign demands, a pattern that the dispute with the European Union in 2019 would repeat.

Notes

1. SIX Group, “30 years at a glance”, SMI anniversary timeline, https://www.six-group.com/en/site/smi-30years/time-journey.html. The timeline records that the SMI was launched on 30 June 1988 at a standard value of 1,500 points, that it was created in the context of the SOFFEX derivatives exchange (today Eurex) and that the first index options were traded on 7 December 1988. ↩
2. VeZR, “Die Börse”, https://vezr.ch/DIE-BOeRSE/. ↩
3. HLS, Meyerhans, “Börsen”, https://hls-dhs-dss.ch/de/articles/013741/. The HLS gives 1993 as the year in which the SWX was founded as an entity, while other sources give 1995 for the merger of the three exchanges. The difference reflects the gap between the creation of the company and the completion of the merger. ↩
4. Swiss Finance Museum, “The history of trading”, https://www.finanzmuseum.ch/en/home/visit/guided-tours/history-of-trading.html. ↩
5. Bundesgesetz über die Börsen und den Effektenhandel (Börsengesetz, BEHG) vom 24. März 1995, SR 954.1, text as at 1 January 2013, published by takeoverpractice.ch, https://www.takeoverpractice.ch/tl_files/inhalte/Rechtsgrundlagen/BEHG/Ausser_Kraft_gesetzter_Gesetzestext/Alt_Boersengesetz_954.1_Stand_01_01_2013_de.pdf. The footnotes to the Act record the entry into force of the general provisions on 1 February 1997 and of the provisions on disclosure and takeovers (among them Arts. 20–33) on 1 January 1998. Art. 1 states the purpose of ensuring transparency and equal treatment for investors. ↩
6. HLS, Meyerhans, “Börsen”, https://hls-dhs-dss.ch/de/articles/013741/. ↩
7. BEHG, Arts. 4, 20, 22 and 32, text as at 1 January 2013, https://www.takeoverpractice.ch/tl_files/inhalte/Rechtsgrundlagen/BEHG/Ausser_Kraft_gesetzter_Gesetzestext/Alt_Boersengesetz_954.1_Stand_01_01_2013_de.pdf. In the version of 2013, Art. 20 listed the thresholds of 3, 5, 10, 15, 20, 25, 33⅓, 50 and 66⅔ per cent of the voting rights. ↩
8. Swiss Takeover Board (Übernahmekommission, UEK), home page, https://www.takeover.ch/. The Board describes itself as having been created under the BEHG and gives its address as Stockerstrasse 54, 8002 Zurich. ↩
9. Wolfgang Wohlers, “Insiderhandel aus straf- und aufsichtsrechtlicher Perspektive”, presentation, University of Zurich, 17 December 2013, https://www.finreg.uzh.ch/dam/jcr:00000000-21e2-3cf8-0000-000056f9f9a1/FF17.12.2013_Praesentation.pdf, on the entry into force of Art. 161 of the Swiss Criminal Code on 1 July 1988 and its replacement by Art. 40 BEHG on 1 May 2013. Art. 161bis of the Criminal Code (price manipulation) was inserted by Art. 46 of the Stock Exchange Act of 24 March 1995, which entered into force on 1 February 1997, see the text of the BEHG on LexFind, https://www.lexfind.ch/tolv/148081/de. On the transfer of both offences into the BEHG in 2013, see Mondaq, “Revision of the Stock Exchange Act: New Rules on Insider Trading”, https://webiis08.mondaq.com/commercial/252046/revision-of-the-stock-exchange-act-new-rules-on-insider-trading. The provisions were carried over into the FinfraG in 2016. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.