As with many parts of the world, binary options in Switzerland are gaining popularity among many retail traders as an alternative form of financial investments. This is largely due to the fact that this trading type can be lucrative and is simple to grasp. No longer does the average retail trader have to be concerned with the complexities of market analysis before making his trading decisions. Instead, he merely has to determine if the price of an asset will end up higher or lower than its current price by the time the option expires.
Perhaps due to the proliferation of binary broker firms on the internet, many traders in Switzerland are worried about being scammed by unscrupulous brokers. To help our readers in their choice, we have shortlisted a few highly recommended companies that are ideal for traders residing in Switzerland. The suitability of these brokers to Swiss based investors are based on certain criteria such as:
- Operational Transparency
- Quality of Customer Service
- Range of Product offerings
- Regulatory Status
Best Brokers in Switzerland
Since there are no locally based binary brokerage companies in Switzerland, Swiss traders have no choice but to sign up with offshore brokerage firms. We highly recommend our readers in Switzerland to only deal with those companies that are authorized and licensed to operate by the Cyprus Securities Exchange Commission (CySEC) for safe measure. Do not be fooled by binary brokers that claim to be regulated by FINMA. These unscrupulous firms hope to fool unsuspecting traders with the Swiss sounding names whereas they are actually not regulated by any regulatory agency at all. To help traders in Switzerland to avoid being scammed, we have shortlisted a few highly recommended brokers that can meet the trading needs of investors that are based in Switzerland.
In Switzerland, the financial regulatory body that is in charge of regulating the financial industry is the Swiss Financial Market Supervisory Authority (FINMA). Based in Bern, FINMA is independent from the Swiss central federal administration and has its own legal personality. It is solely accountable to the Swiss parliament. FINMA’s area of supervision covers the banking sector, the insurance sector, the stock exchange and other financial intermediaries in the financial services industry. Established under the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA) in 2007, FINMA was the result of the merger of 3 separate agencies, the Federal Office of Private Insurance (FOPI), the Swiss Federal Banking Commission (EBK) and the Anti-Money Laundering Control Authority.
As a statutory body, FINMA is responsible for the overall wellbeing and health of the financial industry in Switzerland. Its job involves combating money laundering and when needed administering bankruptcy proceedings and financial restructuring. In addition, it acts as the supervisory body of all the players in the financial industry as well as handling complaints from aggrieved parties due to the decisions of the Takeover Board on public takeover bids.
FINMA is also the regulatory body which grants companies and organizations their operating licenses in areas which fall under its jurisdiction. It monitors these license holders to ensure that there is compliance with all the regulatory requirements. In situations where there is noncompliance, FINMA can impose sanctions or provide administrative assistance.
With regards to binary trading in Switzerland, under the Swiss Bank Directive 3a, financial service providers that hold customer funds in the form of deposits in the trading accounts are required to obtain a banking license from FINMA. Due to this strict requirement, many brokers have opted to withdraw from the Swiss binary trading market. It should be remembered that Switzerland is one of the world’s leading banking centers and is tightly regulated by the Swiss authorities. In other words, obtaining a banking license requires a huge capital commitment, an amount which most binary operators will not commit to.
European Union Regulations
Given the stringent regulatory requirements imposed on online brokerage firms in Switzerland, there are currently no binary firms operating from Switzerland. So where does this leave traders in Switzerland?
Because of the close economic and historical relationships that Switzerland has with the European Union, the Swiss authorities do not specifically forbid EU based brokers from signing up Swiss traders. In other words, Swiss traders can still trade binaries through offshore platform providers.
Deposit Methods Available In Switzerland
As one of the main banking centers and major tourist destinations in the world, Switzerland has a well developed payment industry. Investors in Switzerland will be able to easily fund their trading accounts with offshore operators using eWallets such as Neteller and PayPal, credit/debit cards and bank wire transfer.
- Is it legal to trade binaries in Switzerland?
Yes. It is legal to trade in Switzerland.
- Are binaries regulated in Switzerland?
Yes. They are regulated in Switzerland under FINMA.
- How to trade binaries in Switzerland?
Due to the lack of brokerage firms that are regulated by FINMA, Swiss traders can only trade binaries through offshore companies.