The London experiment: virt-x

A pan-European ambition

The new electronic exchange had scarcely been completed when the Swiss market faced a strategic question that went to the heart of Zurich’s position. At the end of the 1990s the European exchange landscape was consolidating. Paris, Amsterdam and Brussels combined to form Euronext in 2000, London and Frankfurt negotiated a merger that ultimately failed. At the same time the large international investment banks, most of them based in London, pressed for a single platform on which they could trade and settle the leading European shares efficiently. Investors increasingly organised their portfolios by industrial sector across Europe, while the national exchanges still organised trading by country. A Swiss exchange that listed the shares of Nestlé, Novartis, Roche, UBS and Credit Suisse risked losing trading in these stocks to London if it did nothing.

The answer of the SWX was virt-x. In 2000 the Swiss exchange combined its blue-chip segment with Tradepoint, an electronic exchange in London, to create a new trading platform under the supervision of the British Financial Services Authority. Trading on virt-x began on Monday, 25 June 2001, with the shares of 29 leading Swiss companies in the Swiss Market Index, among them Nestlé and Swissair. From July 2001 the platform was to offer trading in more than six hundred leading European equities, covering around 80 per cent of European market capitalisation. The Swiss exchange held 38.9 per cent of the new company.¹

A return to Zurich

The move of the most important Swiss shares to a platform in London was a remarkable decision for a national exchange. It meant that for eight years the Swiss blue chips were traded under British supervision, while the smaller Swiss companies remained on the SWX in Zurich. The ambition to build a pan-European exchange from a Swiss base was not realised. Although virt-x offered trading in European shares outside Switzerland, it never attracted a significant share of that business, since the investment banks that had supported its creation continued to trade most European stocks on their home exchanges. The Swiss exchange gradually increased its stake and eventually took full control of the platform, which it renamed SWX Europe.²

In 2008 SIX announced that it would close SWX Europe by the middle of 2009. Trading in the 32 Swiss blue chips of the Swiss Market Index and the Swiss Leader Index returned from London to Zurich, forty positions in London were eliminated and the group expected annual savings of around CHF 15 million.³ Trading in the blue chips resumed in Zurich on 4 May 2009.⁴ The episode had lasting consequences for the self-understanding of the Swiss exchange. It showed that a small national market could not create a European exchange on its own. It also showed that trading in Swiss shares, once concentrated in Zurich, could be taken back there when the attempt failed. The lesson that the value of the Swiss exchange lay in its home market and in the quality of its infrastructure prepared the ground for the strategy of SIX after 2008.

Notes

1. swissinfo.ch, “Swiss blue chips make successful move to London”, 25 June 2001, https://www.swissinfo.ch/eng/swiss-blue-chips-make-successful-move-to-london/2105620. The article explains that the investment banks wanted a platform on which they could trade and settle all pan-European blue chips efficiently and that the exchanges of Paris, Amsterdam and Milan had already moved towards consolidation. ↩
2. Wikipedia, “SWX Europe”, https://en.wikipedia.org/wiki/SWX_Europe, according to which virt-x became a wholly owned subsidiary of the SWX group in late 2002 and formally changed its name to SWX Europe in early 2008; Global Custodian, “virt-x Changes Name To SWX Europe Limited”, https://www.globalcustodian.com/virt-x-changes-name-to-swx-europe-limited/, giving 3 March 2008 as the effective date of the change of name. ↩
3. Finextra, “Swiss Exchange to close SWX Europe with the loss of 40 jobs”, https://www.finextra.com/newsarticle/19263/swiss-exchange-to-close-swx-europe-with-the-loss-of-40-jobs. The report notes that a representative office would remain in London. ↩
4. Wikipedia (German), “SIX Swiss Exchange”, https://de.wikipedia.org/wiki/SIX_Swiss_Exchange, consulted for orientation. The article dates the opening of virt-x to 25 June 2001 and the return of trading to Zurich to 4 May 2009. ↩

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.