Switzerland's three bank-owned exchange businesses - the SWX Swiss Exchange, SIS and Telekurs - have signed a letter of intent to combine their operations into a single streamlined organisation that will provide clients with one-stop securities trading services.
The three groups, which are all mutually owned by Swiss banks, currently provide trading, clearing and settlement and data dissemination services.
In a joint statement the firms say that intensified international competition, increasing demands on technical infrastructure, rapidly changing customer needs and the growing complexity of regulatory requirements are all considerations that led them to reassess the way they operate.
The statement says there will be "no significant job layoffs will result from the integration process".
The move comes amid the wave of exchange consolidation sweeping the European markets, and ahead of the introduction of the EU's Markets in Financial Instruments Directive (MiFID) in November which aims to increase competition between trading platforms in the region.
But through the combination the Swiss exchange is aligning its business model to that of Deutsche Börse, which has been under pressure from to revamp operations and spin off its clearing and settlement units.
But SWX chairman Peter Gomez, says the merger will strengthen the Swiss financial centre "by offering integrated infrastructure that spans the entire value chain".
"Moreover, the open multi-provider architecture affords us unhindered access to all possibilities for international collaboration," he adds.
The structure of the new organisation will be developed and an implementation plan drawn up in the coming months, the groups say.
Subject to approval by owners and relevant authorities, the transaction is expected to take effect in early 2008.