Switzerland

Switzerland regulates retail forex in a way no other European country does. It is not part of the EU or EEA, so the ESMA product intervention does not apply, and the entry requirement is set far higher instead.

The banking licence requirement

Accepting retail client funds for margin trading is treated in Switzerland as taking deposits from the public, which requires authorisation as a bank or securities firm from FINMA. That is why the best-known Swiss forex brokers are literally banks, supervised under the same framework as any other Swiss bank: capital adequacy, liquidity requirements, audited reporting, and the full weight of FINMA's supervision.

The consequence is a market of very few participants, all of them substantial. There is no Swiss equivalent of the long list of lightly capitalised firms found in offshore jurisdictions, because the licence itself excludes them. The difficulty of entry is the protection.

Leverage

Because Switzerland is outside the EEA, the 30:1 cap does not apply, and Swiss brokers may offer higher leverage than any EU broker — often around 100:1 on major pairs, set by the firm within FINMA's framework rather than by a statutory ceiling. For a trader who found the ESMA caps limiting, this is one of the few well-regulated jurisdictions still offering more. Higher leverage remains higher risk; what differs here is the counterparty's quality, not the arithmetic of a losing position.

Deposit protection

Because the broker is a bank, client cash is covered by the Swiss depositor protection scheme up to CHF 100,000 per depositor per institution — a genuine advantage over the segregation-only arrangements at most brokers, and a higher limit than most European compensation schemes.

Tax

Private capital gains are generally exempt from income tax for Swiss residents, but the exemption depends on being a private investor rather than a professional trader, and the tax authorities apply criteria covering frequency, holding period, leverage and whether trading income is a significant part of your livelihood. Active leveraged trading can lead to professional classification, which makes gains taxable and subject to social contributions. This is a genuine planning issue, not a formality, and it merits advice before the first profitable year rather than after it.

Checks

FINMA publishes lists of authorised banks and securities firms, and a warning list. Verify directly.