SIX, the company behind the Swiss stock exchange, is working toward the launch of a “full end-to-end and fully integrated digital asset trading, settlement and custody service” soon.
Switzerland’s stock exchange – owned and managed by SIX – has announced its intention to begin offering crypto-specific markets in the very near future. The new SIX Digital Exchange, SDX for short, is – will be fully regulated by authorities in its native country, and backed by the Swiss National Bank, in the same way as its main exchange.
Interestingly, the SDX will operate upon completely new, blockchain-based infrastructure – which, according to Tom Zeeb SIX’s Head of Securities & Exchanges, is not inherently technologically unique, but is very different from other similar players because “SIX is already a significant infrastructure provider globally.”
“We are already regulated as an FMI [Financial Market Infrastructure] by [Swiss Financial Market Supervisory Authority] FINMA, and by the Swiss National Bank,” he continued.
“We provide trading services through Swiss Exchange – we provide clearing, custody, settlement as well as payment services. All of that value chain is under our control, and that is unique. There are very, very few – and none of our size – market infrastructures that have the entire value chain from trading through to payments under their control…
“…When we now look to develop a new service in the digital space, it cannot be vapourware, it cannot be something that is tested out on the customers. We are very familiar already with operating mission-critical activity for markets. that’s what the infrastructure does. The digital exchange takes that one step forward, and will build the bridge between the traditional world and the new world for our clients.”
The intention for SDX is for it to eventually become a digital asset ecosystem, or “a platform that allows platform participants to build their own business models within that ecosystem… We are putting together a team of developers and advisors in creating ICOs and products around that.”
“We fully expect,” Zeeb asserts, “there to be an ‘App Universe’ of clients and other providers providing services around this ecosystem.”
According to Jos Dijsselhof, CEO SIX, “This is the beginning of a new era for capital markets infrastructures. For us it is abundantly clear that much of what is going on in the digital space is here to stay and will define the future of our industry.”
The company has been working on this “for some time”, according to Zeeb. This means it is now at the point in its roadmap that demands rigorous testing to ensure that the system is robust, another big step on the horizon is getting assurances that the regulatory environment around SDX can ensure confidence in its services.
As we reported earlier in the year, FINMA issued guidelines on policing of ICOs back into February, in order to bring some clarity to rules that potentially effect up to a quarter of the $3bn marker for ICOs. In them, it echoed the US Securities Exchange Commission’s belief that many ICOs are analogous to share offerings, and that they should operate under existing rules – saying ICOs “cannot simply circumvent the tried and tested regulatory framework.”
Though it intends to look at offerings on case-to-case basis, FINMA’s guidelines offer clear definitions of when action should be taken, focusing on the “economic function and purpose” of tokens and their “underlying purpose” – clearly marking the differences between those that should be considered currencies, those that offer Utility and those that should be treated in the same way as stocks, shares and other investments.
At the time, FINMA’s Mark Branson said the Swiss “approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws.”
Zeeb says that discussions regarding its – and the potential products it will offer markets in – position within current regulatory frameworks are ongoing, but posits a first half of 2019 as the expected launch window for the service.
You can see all of his comments in this video.