European traders are banned from trading stock in hundreds of Swiss companies from Monday following a breakdown of treaty talks between Switzerland and the European Union.

Swiss regulators have imposed a ban on EU exchanges trading Swiss equities after the European Commission allowed the 'equivalence' status granted to the Swiss stock exchange to lapse.

The move followed a lengthy standoff between Brussels and Bern over a host of political arrangements between Switzerland and the bloc.

For several years, the EU has sought to consolidate more than 120 bilateral treaties governing a range of political commitments into a single accord, in order to ensure Swiss cooperation with political commitments such as immigration without losing EU market access.

Last week, the London Stock Exchange's Turquoise and MTF XLOM, Aquis Exchange and CBOE Europe all confirmed that they would be forced to halt trading in over 250 Swiss equities if the impasse continued and Switzerland's 'equivalence' was revoked.

From Monday, trading of shares in Swiss blue chip companies such as Nestle, Novartis and UBS will only be permitted on the Zurich stock exchange, with European investors and traders facing financial penalties and possible imprisonment of up to three years for trading the stock, according to the countermeasures proposal published in November 2018 by the Swiss Federal Department of Finance (FDF).

Swiss traders could also lose their access to EU-based exchanges if they flout the ban.