(Adds comment from Aquis and Cboe Europe)
ZURICH, June 24 (Reuters) - The Swiss government said on Monday it was ready to ban stock exchanges in the European Union from trading Swiss shares -- intensifying a row over a stalled partnership treaty.
The move followed the EU not extending stock market equivalence to Switzerland after Brussels grew frustrated with Swiss foot-dragging over the long-discussed agreement.
Bern said in response it would withdraw recognition from trading venues in the EU from July 1 to "protect the Swiss stock exchange infrastructure in the event of non-extension".
"Trading venues in the EU would thus be prohibited from offering or facilitating trading in certain shares of Swiss companies from that date," the Swiss government said in a statement.
The EU refrained from extending stock market equivalence, due to expire at the end of June, because the Swiss did not endorse a partnership treaty with the EU that had been negotiated for years, a diplomat told Reuters on Friday.
Granting stock market equivalence is the EU's major leverage in trying to get the Swiss to finally sign off on an agreement governing ties, but Switzerland's foreign minister has said repeatedly that Bern will not be rushed into any deal although it remains open for talks.
Bern's request this month for "clarifications" on three areas - protecting wages, regulating state aid and defining the rights of EU citizens in Switzerland -- is seen in Brussels as demands to reopen the treaty text, which the EU refuses to do.
SIX, the operator of the Swiss bourse, said it welcomed the Swiss decision to activate the protective measures, as this meant EU market participants could still access the Swiss domestic market and continue to be able to trade Swiss shares directly at SIX.
Pan-European stock trading platform Aquis Exchange Plc said; "If equivalence is not extended, and if the Swiss Federal Department of Finance (FDF) rescinds recognition of EU trading venues for the trading of Swiss securities, then Aquis Exchange will take the necessary steps to comply with the directive."
It also said it will only implement the removal of Swiss securities if there is a formal notice from the Swiss FDF.
Another pan-European share trading platform, Cboe Europe , said; "In the event that Switzerland is not granted equivalence from the EU by June 30, Cboe Europe will not be permitted to admit to trading securities with a Swiss registered office and listed on a Swiss exchange with effect from the start of trading on July 1." (Reporting by John Revill in Zurich and Huw Jones in London, editing by Ed Osmond)