Swiss investors pay a whole slew of different fees when trading securities. On top of custody fees, currency exchange costs, brokerage fees and government duties (stamp taxes), stock exchange fees may also apply.
Transparency is lacking
Unlike brokerage fees – which are generally clearly stated – stock exchange fees rarely appear on the websites of Swiss banks and brokers. One reason for this is that exchange fees are very complex and vary based on the stock exchanges, types of securities and volumes involved. They may also change at any time.
On the other hand, it would be relatively simple for Swiss banks to cover exchange fees by applying a flat-rate fee for each exchange used or working them into their brokerage fees.
In actual practice, many Swiss banks (like Raiffeisen) will not provide information about stock exchange fees even when this information is specifically requested. That is the main reason why stock exchange fees cannot be included in the broker comparison on moneyland.ch. However, the comparison does show whether exchange fees are included in the costs shown or are applied separately.
Stock exchange fees: covered or passed on?
Stock exchange fees can vary markedly from one exchange to another. In some cases, stock exchanges use different fees for different brokers. Brokers which maintain a large volume of trades on an exchange are often charged lower rates or receive incentive discounts. For investors, the deciding factor is whether or not a broker passes exchange fees on to clients.
Most Swiss banks and brokers charge exchange fees separately from brokerage fees. The Migros Bank, PostFinance, Bank Coop and the Basler Kantonalbank (EasyTrading) all pass on the full cost of exchange fees to investors. Other banks, like UBS, may use flat-fee models to simplify the process of passing on stock exchange fees.
Brokers which cover stock exchange fees
Some Swiss online brokers include the cost of exchange fees in their brokerage fees, so investors do not have to pay exchange fees separately. The online brokers Saxo Bank, Strateo and CornèrTrader, for example, do not charge exchange fees in addition to brokerage fees.
TradeDirect, the online trading platform run by the Banque Cantonale Vaudoise, only passes on exchange fees from the Swiss stock exchange SIX to investors. Fees from other European exchanges and U.S. stock exchanges are not passed on to users. The Aargauische Kantonalbank uses a similar approach in that exchange fees from the SIX exchange and the Berne eXchange (BX) are charged separately, but those from other European exchanges and U.S. exchanges are not. The exact opposite holds true at Credit Suisse: investors do not pay SIX fees separately, but they do pay fees from other stock exchanges themselves.
Swiss stock exchanges compared
SIX – the main Swiss stock exchange – charges a number of different fees to participating brokers including participation fees, admission fees and recurring annual fees. The fees which most directly affect investors are transaction fees and “ad valorem” fees which are based on the type of securities being traded, the volume of a trades and the number of transactions performed.
The SIX costs which the VZ Depotbank passes on to its customers provide a good example of an average fee structure: The exchange charges a reporting fee of 20 centimes plus a transaction fee of 1 Swiss franc per trade plus an ad valorem fee of 0.004% (minimum 50 centimes, maximum 55 francs). If you were to buy a share valued at 50,000 francs, you would pay 3.20 francs in total SIX exchange fees.
The fee structure at the Berne Exchange (BX) is somewhat less complex than that of SIX. Participating brokers pay a transaction fee of 0.01% on top of the fees they pay to participate in the exchange, plus a ticket fee of 10 francs or 5 francs (for secondary listings) per transaction.
No additional fees are charged for transactions on the SIX exchange brokered by Credit Suisse. TradeDirect does not charge additional fees for trades on the Berne Exchange. Saxo Bank, Strateo and CornèrTrader do not charge additional exchange fees for trades on both SIX and the Berne Exchange.
UBS charges investors a flat rate equal to 0.01% of transactions towards the cost of exchange fees. TradeDirect passes on SIX exchange fees to investors using a flat rate of 0.006% (minimum 2 francs, maximum 65 francs).
The majority of Swiss brokers pass on fees charged by European stock exchanges to investors. A handful of Swiss brokers including Strateo, Saxo Bank, Cornèrtrader, TradeDirect (BCV) and AKB include exchange fees in their standard brokerage fees. UBS charges investors a flat rate equal to between 0.01% and 0.7% of transactions made on European exchanges – depending on the exchange used.
The exchange fees which the VZ Depotbank passes on to investors who trade on the XETRA exchange provide a good example of a typical cost structure for trades on European exchanges. Firstly, a trading fee equal to 0.0048% (minimum 0.6 euro, maximum 18 euro) applies. An additional handling fee of 0.43 euro per trade is charged, along with a clearing fee equal to 0.0015% (minimum 0.4 euro, maximum 5.70 euro). If you were to buy shares valued at 50,000 euro, you would pay a total of 3.98 euros in exchange fees.
U.S. stock exchanges
Most Swiss brokers pass on fees charged by U.S. stock exchanges to investors. Here again, a handful of Swiss brokers including Saxo Bank, Strateo, CornèrTrader, TradeDirect (BCV) and AKB do not charge U.S. exchange fees separately – these are covered by brokerage fees. UBS passes on U.S. exchange fees by way of a flat-rate fee equal to 0.002% of transactions.
The exchange fees which VZ Depotbank customers pay to trade on the NASDAQ, AMEX or the NYSE are typical of those which customer of most Swiss brokers pay for U.S. trades. An “SEC fee” equal to 0.00218% (minimum USD 0.01) is applied to each securities sale (not to purchases). This fee covers part of the contributions which U.S. self regulating organizations – and therefore brokers – pay to the U.S. Securities and Exchange Commission. Selling a share worth USD 50,000 will cost a VZ Depotbank customer USD 1.09 in SEC fees.
Real time data
You may pay additional fees if you choose to obtain real time data from stock exchanges. CornèrTrader, for example, charges a flat-rate fee of 6 francs per month to investors who opt to receive real time data from the SIX Swiss stock exchange and 1 franc per month for real time data from U.S. exchanges. Swissquote charges a real-time markup of 85 centimes for all transactions.
In relation to other trading costs like brokerage fees and government stamp taxes, exchange fees are not particularly significant. But finding out what you can expect to pay in exchange fees before you make large trades can help you avoid unexpected charges. This is especially true when you trade on smaller exchanges. If you prefer to play it safe, use an online broker which does not charge additional exchange fees.