Is Forex Trading Legal in Switzerland?

Posted by Bella on December 18th, 2019

Switzerland is recognized in Europe in Forex markets as a financial and banking center. The security and even financial expansion of the country have provided Swiss Forex brokers in the country a high reputation. Not just finding great trading conditions but also getting transparent trading activities. The Swiss franc (CHF) is one of the primary trading currencies in the society. Though there are enough regulations to save the local traders from scam and theft, this may not be enough especially where a Swiss national chooses to take an international brokerage firm.

Forex Trading History in Switzerland

Currency trading was very lenient in Switzerland before 2008. Before this, there was little regulative purpose concerning the trading of currencies in the nation. Most of the laws and regulations during this time were meant to restrict money-laundering when changing currencies. As a result, there were more than 200 forex brokers who were running in the country. It is simply that not all these forex brokers could be entrusted with funds from their users. In a bid to guard the clients against illegal forex brokers, the regulating administration of financial services in the country chose that Forex brokers should have banking permits before they are authorized to run.

Following the 2008 bankruptcy and the lack to protect users from dangerous forex brokers, on March 31, the Swiss financial market supervisory authority tried to have forex brokers fit the same qualifications as that of a bank. The banking industry is oftentimes the most organized area in most markets and this move occurred in only two forex brokerage companies surviving in the country at the period. An important detail to note is that Switzerland is recognized for its steady financial institutions which emerged because of the strict rules and required self-regulation.

How to Choose a Swiss Forex Broker

Whether a broker is based in Switzerland or abroad, the best online firm will commonly have the following 11 features:

• Needs a minimum deposit you can achieve
• A good standing
• Provides negative balance security
• Will take you as a client
• Well regulated
• Has minimum order slippage
• Has intuitive deposit and withdrawal methods
• Allows all currency pairs and assets you want to trade-in
• Provides sufficient leverage ratio for your preferred trading strategy
• Makes prices with competitive dealing spreads
• Gives negative balance protection
• Separates customer's accounts from its own

Another important part to consider when looking for a proper online forex broker is what type of trading software the broker holds. Many brokers allow proprietary trading platforms to customers, while some depend on third-party platforms like MetaTrader 4 and 5 from MetaQuotes. To know more about forex trading in Switzerland and how to get started, you can check this link.