First-Class Forex Brokers In Malaysia 2018.
The role of Bank Negara in Malaysia Forex sphere. Bank Negara is actually the name behind Malaysian National Bank. It has a giant role for traders and trading websites, because it is the official regulator for them in the country/5(27). Forex trading in Malaysia is a pretty good example. It is likely that if you are trading your own funds, not bothering anyone and not being very public about it, nothing will happen to you at all. If you do something that angers the authorities, they can then come after you for every little law that you are breaking including this one.
This essentially means that the buying and selling of foreign currency in Malaysia is only allowed with licensed commercial banks, Islamic banks, investment banks and international Islamic banks with the relevant license. The confusion about the legality of retail Forex trading in Malaysia stems from two conflicting points:. As a retail trader trading with an offshore broker, are you exchanging currencies? Or are you considered to be investing your funds overseas? Laws especially in Asia are worded such that the state will always have the upper hand in most situations.
Does this mean that the police are out there arresting everyone who gathers in groups of 5 under suspicion of criminal activity? But if the authorities wanted to arrest any particular group of people under that law, it technically could. Note that this is only valid if you are trading your own funds. Also note that this discussion does not take into account Islamic customs and law , which to the best of my knowledge are not technically enforceable under Malaysian state and federal law.
This is something that I am not a lawyer, nor do I play one on TV. This is all simply my opinion based on my research.
Regardless, Malaysian Forex traders may indulge in Forex trading, provided they follow all the existing laws of the country that govern trading and investments. Malaysia had initially outlawed the concept of Forex trading by terming it as an illegal activity that included hefty fines and even incarceration if a person is deemed to have indulged in FX trading.
However, over the recent years, Malaysia has slowly opened up to the idea of Forex trading, but the concept in itself is still in primitive stages of development in the country.
Being a nation that adheres to Islamic ideals, a majority of traders from Malaysia should carefully contemplate the legality of FX trading according to their religious beliefs, and ascertain whether the broker of their choice is Sharia compliant. As far as regulation of Forex brokers is concerned, the Malaysian regulatory agency is still in its primitive stages, and there is an awful lot of confusion regarding the actual regulatory authority for Malaysian Forex brokers.
The Bank Negara, which is the Central Bank of Malaysia, is responsible for managing the Ringgit currency, while the Securities Commission of Malaysia is in charge of regulating and supervising financial companies. The lack of regulatory oversight can be dangerous for investors, as there is a significant amount of potential for scams and broker irregularities. Several companies have based their FX operations in Malaysia due to the lack of any regulatory guidelines and have exploited the loophole to siphon off millions of dollars from traders around the world.
The lack of any regulatory framework also deters the Malaysian authorities from supervising the conduct of its member companies, since brokers are free to set up their headquarters in the country to provide services to an international audience.
A highly deregulated market is suitable for scammers to make quick profits from unsuspecting traders. On the contrary, there are genuine and reliable Forex brokers that offer authentic Forex brokerage services to Malaysian traders. There are both local as well as international brokers that provide a safe and secure trading environment that is completely void of any financial malpractices. Of course, as a trader, you should be willing to put in the effort to research on numerous Forex brokers to understand their pros and cons, before deciding to take the plunge and investing your hard-earned money.
Malaysia is new to the Forex trading scene, but the country has witnessed a meteoric rise in popularity among retail traders from different backgrounds.
Bank Negara is actually the name behind Malaysian National Bank. Subscribe to this forum Receive email notification when a new topic is posted in this forum and you are not active on the board.
Before trading, it is the duty of every trader to perform adequate research before venturing into the markets. Today it is and here are all the things you need to know about Forex trading in Malaysia, if this is your plan.