In addition to Switzerland's primary stock exchange (the SIX Swiss Exchange), Switzerland is also home to the lesser-known BX SWISS stock exchange in Bern.
The BX primarily lists Swiss SMEs which are not able to afford to make an initial public offering on the SIX exchange. In addition to the stocks of companies which are only listed on the BX SWISS, stocks listed on SIX Swiss Exchange can also be traded on the BX SWISS.
Trade foreign shares in Swiss Francs
Since November 2013, the exhange lists non-Swiss securities denominated by the Swiss franc rather than the corresponding currencies denominating the foreign securities. This allows investors to invest in foreign securities in Swiss francs and thus bypass the cost of currency exchange. This feature is unique to the BX Swiss and is made possible thanks to the exchange's partnership with the German Baader Bank.
Over 1000 stocks from 30 countries listed
Altogether, over 1000 stocks originating from over 30 countries can be traded in this way between 9:15am and 5:00pm, including Apple, Adidas, Amazon, Sony or H&M shares. Other types of assets, such as structured products and ETFs, cannot be traded.
Fees on the BX Swiss are always listed in Swiss francs. An exchange fee equal to 0.01% of each transaction or 10 francs (whichever is greater) applies to trades on the exchange. This fee applies in addition to the brokerage fees charged by your broker.
Local vs. international brokerage fees
Because foreign securities listed on the exchange are denominated by Swiss francs, Swiss brokers charge the lower brokerage fees applicable to Swiss securities, rather than the higher brokerage fees applicable to foreign securities. Brokers also do not charge foreign currency conversion fees and spreads because transactions are entirely in Swiss francs. The BX SWISS handles currency exchanges, and currency exchange charges are factored into the exchange fee.
Depending on the broker, brokerage fees charged for trades on the BX SWISS exchange may not always match those used on the SIX Swiss Exchange.
For example, BX SWISS trades brokered by Swissquote are subject to a 25-franc brokerage fee on transactions of up to 500 francs. Swissquote charges just 9 francs for trades on the SIX Swiss Exchange worth up to 500 francs.
But Swissquote still charges a 25-franc fee for BX SWISS transactions worth between 500 and 2000 francs, while its brokerage fee for SIX Swiss Exchange transactions is substantially higher at 20 francs for trades in this value range. In addition to brokerage fees, the BX SWISS exchange fees (0.01% minimum 10 francs per transaction), as well as stamp duties, have to be accounted for when comparing the costs.
Pros and cons of BX Swiss
A possible disadvantage of trading on the BX SWISS is that many of the stocks listed are secondary listings. Primary listings typically offer greater market liquidity. For example, the NASDAQ will likely provide greater liquidity to traders in Apple shares because that is the primary listing of Apple Inc.
A possible advantage of trading on the BX SWISS: Depending on the scale and value of transactions (and on which broker is used), trading foreign shares in Swiss francs on the Berne eXchange may prove cheaper than performing the same trade in a foreign currency.
Brokers which trade on the BX
Not all Swiss brokers trade on the BX SWISS. Swiss banks and brokers which trade on the Berne exchange are: Swissquote; Berner Kantonalbank (including money-net.ch); Zürcher Kantonalbank; Credit Suisse; Bank Julius Bär; and Bank Vontobel.
Other brokers may help you purchase securities on the BX SWISS indirectly. This will normally have to be done through a bank employee in person or by phone, which may incurr additional costs.
If you use a broker which trades on the BX SWISS, it may well be to your advantage to trade foreign equities through the BX rather than on foreign exchanges. You can find the ISINs of BX-listed foreign securities on the BX SWISS website.
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