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London Swiss share trading set for February return

By Huw Jones

LONDON (Reuters) - British-based exchanges will once again offer trading in Swiss shares from next month, but it may take time to rebuild volumes, Britain's finance ministry and exchanges said on Friday.

The ministry has set out legislation in parliament that is expected to be approved quickly and allow platforms like Cboe, Aquis Exchange and London Stock Exchange's Turquoise to be able to offer trading in Swiss shares from or just after Feb. 3.

"Once in force, the Swiss State Secretariat for International Financial Matters (SIF) have indicated they will reciprocate by removing restrictions on UK trading venues," a spokesman for the British finance ministry said.

SIF said that once the British parliament approves the legislation, necessary steps will be taken on the Swiss side as soon as possible thereafter.

Brussels blocked European Union investors from trading on Swiss bourses in June 2019 after a treaty row, with Switzerland then banning EU exchanges from trading Swiss shares.

But Britain is no longer bound by EU rules since its full departure from the bloc on Dec. 31 and the British and Swiss authorities flagged their intentions in June with plans for a financial services agreement.

London platforms handled around 1.2 billion euros daily in Swiss shares or about 27% of the total volume in the run up to the EU ban, Cboe figures showed.

Swiss shares were Cboe's fourth biggest market, worth about 787 million euros a day in the first half of 2019, and Nick Dutton, its chief regulatory officer in Europe, said it was difficult to know if trading would return to June 2019 levels immediately.

"Our participants are telling us they want it back, but it's not a given and we have to rebuild that liquidity," Dutton said.

The return of Swiss shares will only partly make up for the loss of 6.5 billion euros in daily trading of euro-denominated shares that left London for EU platforms on Jan. 4.

"We are expecting Swiss volumes to return to where they were on Aquis," said Alasdair Haynes, CEO of Aquis Exchange, adding this may not be straight away.

(Additional reporting by Oliver Hirt in Zurich; Editing by Alexander Smith)