After CS takeover: UBS now holds more than a third of the Swiss stock market

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With the takeover of CS by UBS, there was also a concentration of power in the Swiss stock exchange SIX. The new UBS group now owns more than a third of the local financial infrastructure service provider, making it by far the largest shareholder.

Before UBS took over CS, the two major Swiss banks together held a 34.5 percent share. UBS, which now owns twice as many shares at once, cannot block any decision made by the SIX Board. An absolute majority of ten board members is required to make a decision. However, UBS’s already strong influence is likely to continue to grow, especially as it now has two boards.

It has happened many times in the past that opinions about SIX’s services have varied widely. This is hardly surprising, as the interests of the various institutions in the Swiss financial center differ widely. This is a rather heterogeneous mix, including large banks, locally focused cantonal banks and pure asset managers.

Ermotti does not shy away from criticism

Former and current UBS boss Sergio Ermotti, 63, already had significant influence on the stock exchange’s strategy during his first term in office. With the only major bank in the financial center and a more than 30 percent share of the stock market operating, this position may now become even more solid.

Ermotti has not hesitated to voice any dissatisfaction in the past. For example, a few years ago he harshly criticized SIX’s business model and threatened to look for alternatives.

The stock market later realigned itself in 2018. By weakening the organization, he sold the card business and other business areas that had previously contributed greatly to sales. The stated aim was to become more innovative, faster and undertake more services for banks; that is, services that financial institutions can easily outsource.

High attendance has not been confirmed yet

It remains to be seen whether the new major banking group comprising UBS and CS will want to maintain its high stake of over a third or sell its shares to other shareholders. UBS did not want to comment.

But shares cannot be easily transferred: there is a binding agreement between SIX shareholders to ensure that the structure of their holdings remains stable in the long term. According to the Articles of Association, changes to be made on a shareholder basis must be approved by the SIX Board of Directors.

If the recipient is not a bank or a participant on the Swiss stock exchange, the transfer may be rejected. Even if participation exceeds usage share (the average of the last three years of sales) by more than 10 percent. When asked about the issue, SIX said there would be no change in its investment structure or services for now. (SDA)

Source :Blick