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Switzerland is a landlocked country located in Central Europe. The country borders Germany, France, Italy, Austria, and Liechtenstein. The country does not have direct access to the sea. Switzerland is and has always been a synonym for discipline, stability, accuracy, and welfare. The country has a strong economy, high standards of living, and sustainable growth. Swiss economy, is admirable. This is also the case with the local Forex trading market – not only is it one of the most secure markets in the world, but the potential profits that its traders can utilize are plentiful.
In our guide, we will dive deeper into what makes the Swiss FX market so attractive. We will assess the regulatory measures that ensure its smooth functioning, and list down the best Swiss Forex brokers. We’ll also discuss important topics that you need to know before opening an account from Switzerland.
Recommended Forex brokers in Switzerland
Choosing the broker that is right for you is never an easy task – and it is bound to be a source of a lot of stress and anxiety. For safety and security of your funds, you should always look for a regulated broker. In addition, as a trader, you need to take into consideration fees, trading platforms, available assets, customer support and more. Our list will help you find the broker in Switzerland that best suits your needs.
Forex trading regulations in Switzerland
Financial trading in the country is regulated by the Swiss Financial Market Supervisory Authority (FINMA). The regulatory body is an independent legal entity, that is responsible for regulating and overseeing the smooth functioning and development of the main market players and operations. First established in 2007, this regulatory was a result of the merging of the Federal Office of Private Insurance (FOPI), the Anti-Money Laundering Control Authority, and the Swiss Federal Banking Commission ( EBK). The FINMA enjoys a high degree of autonomy from the Federal Department of Finance and federal administration and only reports directly to the Swiss Parliament. The main responsibilities of the regulatory body include overseeing, regulating, and assessing the work of banks, insurance companies, stock exchange markets, banks, collectible investment, securities market, and, of course, the Forex trading brokers in Switzerland.
As previously mentioned, this body is fully committed to both customer protection and the further development of the FX market. What is especially impressive is that it manages to achieve both with relatively relaxed regulatory measures that, in no way, compromise the security of the traders. Below, we will provide a more detailed assessment of the FINMA’s main regulatory measures and what they are aimed at.
In addition, it should be mentioned that Switzerland is a member of the European Union. And the country follows the Markets in Financial Instruments Directive (MiFID), that is valid throughout the EU. The MiFID regulations put restrictions on available leverage. Maximum available leverage residents of EU can get are:
- 30:1 _ major currency pairs
- 20:1 _ non-major currency pairs, gold and major indices
- 10:1 _ commodities other than gold and non-major equity indices
- 5:1 _ individual equities and other reference values
- 2:1 _ cryptocurrencies;
Promotional policies
There are two main types of bonuses that the brokers can provide – welcome and refill bonuses. Welcome bonuses are gifted to the trader either upon joining the broker or upon making the first deposit. In turn, the refill bonuses are the tokens of appreciation that the broker issues periodically to the returning clients. When it comes to Switzerland, we regret to inform you that, just like in many other countries, the provision of bonuses and promotions there is prohibited.
Bonuses and promotions are a great way for brokers to expand their client base and attract new traders. However, often, bonuses urge traders to over trade and give them wrong motivation. To prevent brokers to turn trading into gambling, provision of bonuses and promotional companies are banned.
Financial reports
Brokers are required to submit regular periodic reports and audits of their operations. Those reports have to contain very detailed information on every segment of the broker’s activity, that the regulatory body then assesses the ability of the local brokers to meet the standards issued in their respective countries.
When it comes to the Swiss FINMA, it once again demonstrates an extreme dedication to customer protection. Unlike other regulatory bodies in Europe and across the world, the FINMA requires its licensees to submit both the internal and external audits of their activities. This particular measure exists for two main reasons. Firstly, by carrying out periodic reviews of the activities of the Forex trading brokers in Switzerland, the FINMA ensures that no malicious activities take place, and traders are not subjected to any unnecessary risks. Secondly, by having to examine the operations of the local brokers, FINMA is always able to identify the pitfalls within the Swiss FX market and take timely measures to address them accordingly.
One more measure that the FINMA requires the Swiss traders to follow in order to qualify for the regulatory body’s license is the necessity to change the management upon the organization’s request.
Popular trading platforms in Switzerland
As a trader, you will come across multiple trading platforms. Many brokers have built their own trading software. And many others use third party platforms, such as MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. The third party platforms are typically more reliable, and transparent. These platforms can be installed on your desktop computer, in addition, they come with mobile and web versions. Moreover, the trading platforms enable traders to conduct a complete technical analysis, and offer trading automation capabilities. It should be mentioned that MT4 and cTrader typically offer access to only FX, crypto derivatives, indices, and commodities, while MT5 is a multi-asset software.
Summary
Overall, we can say that Forex and CFD trading is well regulated in Switzerland. The country has one of the strongest economies and well-developed financial systems in the region. Trading FX is regulated by the Swiss Financial Market Supervisory Authority ( FINMA), in addition, the country is an EU member state and follows rules and guidelines of the Markets in Financial Instruments Directive (MiFID). Residents of the country can open accounts with locally regulated brokers, or find international ones that have good reputation and great trading conditions, such as: XM, AvaTrade, Plus500, and others.
FAQs on the list of best Forex brokers in Switzerland
Is Swiss Franc available for daytrading?
Is Forex taxed in Switzerland?
