Switzerland is a go-to investment hub for investors, companies, institutions and other market contributors looking to benefit from one of the most regulated and safest financial markets in the world. Its low tax structure, and ease of doing business in the country add up to the many reasons why it is an investment destination. The Swiss parliament is highly resourceful in its guidelines and regulatory rules ensuring all investors are protected from broker scams and financial frauds through the highest regulatory intervention.
Although Switzerland offers adequate regulations to protect Forex traders’ investment against fraud and extortion, it does not guarantee that there will be no such incidences. Hence, it is crucial that FX traders take the time to understand how Forex trading works in Swiss, and ways to choose trusted Forex brokers. In this article, we have compiled a list of some key facets to consider when selecting a Forex broker in Swiss.
Regulation is one of the most important considerations to make when choosing an FX broker. FINMA is Switzerland’s Financial Market Authority and independent financial markets regulator. This regulatory body was instituted by the Swiss Parliament in 2007 to oversee legal operations, enforce strict guidelines and fair play on Forex broker regulation as well as monitor all non-banking financial establishments for their protocol in Global Financial Markets. This regulatory body is charged with;
• Licensing: FINMA is responsible for protecting the functionality of Swiss financial markets by ensuring that the licensees are compliant with all rules and regulations surrounding the financial sector. It aims to make sure all financial companies are accountable to restore investor confidence as well as aid in financial sector growth.
• Ensuring liquidity of financial institutions to alleviate risks where issues like financial restructuring and bankruptcy are involved. This is achieved by carrying out audits on licensees to ensure that they are compliant with all legislative requirements.
How does FINMA protect investors ?
This body protects the Forex traders by ensuring that they are not exposed to unnecessary risk. This is done by guaranteeing all brokerage firms do not misuse insider information or try to manipulate the market to their advantage. They also maintain a watch list of companies that are being closely monitored, possibly based on foul play reports in the past. They also have the authority to control brokerage employee transactions to prevent them from misusing their position for their benefit.
FINMA protects the deposits made by an investor who is a client of a bank or securities exchange firm by up to 100,000 Swiss Francs in the event the brokerage firm goes bankrupt. It is also open to investors in the event they encounter any violation of rights within financial markets.
- Trading Platform
Another important factor to consider is the type of trading platform that the potential broker uses. As a trader, you will interact with the trading platform severally during your trading adventures. Hence, it is crucial that you make sure it has a great user interface. An excellent trading platform should have a variety of features such as Forex data, charting tools and even global and local financial news that may affect the financial market. Some of the best trading platforms include Webtrader, MetaTrader4, MetaTrader 5 and Mobile Trader among others.
- Financial Stability
No trader wants to invest in a failing brokerage firm. Fortunately, the Swiss government has put in place stringent regulations that ensure that Forex traders know the financial health and position of a brokerage firm before investing. As a rule by the FINMA, all brokerage firms are required, by law, to publish their financial statements. With this information, traders are better placed to make more informed decisions.
- Customer Support
In the course of your trading, you may need to interact with your Forex broker. These interactions might make a significant difference with regards to whether you will make a profit or loss. For instance, if a trading platform takes too long to execute trades, you are highly likely to lose funds. In such a case, you need an effective and efficient customer service representative who is ready and willing to take care of such issues with utmost urgency.
The Forex broker should also have several channels of communication, including live chats, instant email, online contact forms and phone numbers.
With these tips, choosing the right Forex broker should be easy for you. All you need is to do your legwork and you will be good to go.