Licensed foreign exchange broker providing both on-line and traditional brokerage services to institutional investors forex platform in malaysia individuals. 135, Ground Floor, Wisma Lal Doshi,Jln Tuanku Abdul Rahman. Is online Forex trading legal in Malaysia? The legality of online Forex trading in Malaysia is something many traders are unsure of.
This stems largely from the misinformation found in anonymous posts in trading forums, which are fuelled more by fear rather than fact. However, if you actually go to the BNM website and read through the relevant sections, the answer is quite clear. Thus, the BNM wants to control – to a certain extent – fluctuations of the Ringgit by restricting its foreign currency exchange to only licensed banks and financial institutions. The main aim of the BNM is to limit speculation of the Malaysian Ringgit. It doesn’t care much about the USD, Euro, or Japanese Yen. That’s the first thing to keep in mind. Malaysia’s Exchange Control Act of 1953Officially, the Exchange Control Act states that it’s an offence for anyone to be involved in a foreign currency transaction with anyone who is not an authorised dealer.
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. I’ll save you the trouble and summarise the main points for you. As a retail trader trading with an offshore broker, are you exchanging currencies? Or are you considered to be investing your funds overseas? 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. The question then is, why would the government want to do that? Unless they have good reasons, the authorities wouldn’t be wasting their time and effort. This brings us back to the question of legality regarding retail Forex trading in Malaysia. Technically, the BNM can bring a case against you if you’re a Forex trader, and accuse you of breaking the law. Not unless you give them a reason to. So Is Online Forex Trading Legal In Malaysia?
Note that this is only valid if you are trading your own funds. If you are trading with the funds of other people, or are soliciting the funds of others, the authorities will come after you. 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. That’s the context with which to consider this issue. If you’re a retail Forex trader trading with your own money and don’t disturb others, you probably won’t get in trouble with the law. However, if for any reason the authorities are out to get you, it will argue in court that you are technically breaking the law. And along with that, it will probably dig out another 20 laws you’ve technically broken without you even knowing about it.