The race to catch up following Thursday's lengthy fog delays in Switzerland meant Wallace had to play 36 holes on Friday, having been unable to start his first round on day one.
The Englishman had a brilliant marathon day, making 15 birdies and only three bogeys across the two rounds to reach 12 under par and sit one shot behind French leader Adrien Saddier.
"I had three great nines, I would put it that way," smiled Wallace.
"The first nine this morning wasn't very good, but I managed to get it round and then I found something on the back nine. I played really nicely this afternoon.
"I said to myself a few times out there today that I'm the defending champion so let's try to keep it that way."
Wallace's countryman Jordan Smith and South African Thriston Lawrence shared third place on 11 under after two rounds, while many groups are still either to kick off or complete their second rounds on Saturday morning, with the third round now scheduled to start in the afternoon.
Australian Jason Scrivener was one of those who managed to complete his two rounds, lying at five under after rounds of one-under 69 and four-under 66, leaving him tied for 13th position.
Harrison Endycott was two under after his second straight 69 and also set to make the cut, but it will be a testing 'moving day' for compatriot Daniel Gale, who is still yet to start his second round after shooting 69 on Thursday.
