Feb. 6 (Bloomberg) -- Swatch Group AG said it will stand by its decision to switch to Swiss accounting standards even if exchange regulators make the use of international accounting a requirement for inclusion in the Swiss Market Index.
Comments attributed to Chief Executive Officer Nick Hayek today by Finanz & Wirtschaft newspaper are accurate, Swatch spokeswoman Beatrice Howald said by phone. The CEO was cited as saying that the Biel, Switzerland-based watchmaker won’t change its stance whether that means it drops out of the SMI or not.
Swatch said in October it would switch back this year to Swiss GAAP ARR accounting from international financial reporting standards. The company said the Swiss standard would be “more practical and less theoretical.” Hayek said in a September interview with Finanz & Wirtschaft that “over regulation” under IFRS was becoming a “catastrophe.”
Alain Bichsel, a spokesman for SIX Exchange Regulation, said the background for suggesting stricter rules for SMI-listed companies was that the Swiss GAAP ARR accounting standard was originally meant for small- to mid-sized companies to provide them with an easier procedure.
“No decisions have been made yet,” Bichsel said by phone today. “At this point, it’s simply a suggestion that can be discussed by the public until Feb. 18. After we receive all the opinions, we’ll see if and when any changes would take place.”
Bichsel also said Swatch is the only company that would be affected by the new rules.
Swatch fell 1.1 percent to 535 Swiss francs at 11:08 a.m. in Zurich trading. The stock has gained 16 percent this year.
As much as 10 percent of Swatch’s bearer shares may be held by SMI tracker funds, “so it if falls out of the SMI there will be some impact,” said Jon Cox, head of Swiss research at Kepler Capital Markets in Zurich. “What it will do is underscore the fact that Swatch Group is very much a family-run company.”
Swatch said Feb. 4 that full-year profit rose to 1.6 billion francs, exceeding the 1.49 billion-franc average of 15 estimates compiled by Bloomberg.
To contact the editor responsible for this story: Celeste Perri at email@example.com