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Malaysia central bank states Forex is illegal

Hi Praveen.

1. I see you've been a member of FF for only less than 2 hours ago. Welcome!

2. Am not sure if you're familiar with proper forum SOPs, but I hope you've taken the time to read this thread from start to finish before commenting further to avoid the making of sweeping generalizations such as "Forex is illegal in Malaysia".

3. From your post, I take it your main concern is the legality of FX trading, jurisdiction, and taxation.

4. In point of fact, forex is not JUST for financial institutions in Malaysia. It is legal for everybody in Malaysia when transacted in accordance with exchange control laws (eg. for international trade, education, INVESTMENT etc) and central bank rules. How that is so, can be answered if one were to peruse the debate that went on in this thread.

5. No offshore bank accounts are required. Any experienced retail trader in Malaysia can probably tell you that. Accounts can be operated onshore. By "accounts", I mean FCA cash accounts, not margin accounts. Margin accounts will naturally have to be opened with offshore brokerages as there are currently no onshore brokerages offering retail FX.

6. A country with no restrictions? If you mean restriction on FX investment done within the context of BNM's ECM rules, then Malaysia has no such restrictions as far as I can see. (Of course, you would know this, if you had read this thread from its inception)

7. As for taxation, as long as you are a citizen of any country, you will be subject to the tax laws of that country. If you got away with not paying any taxes (to any country), all power to you! Congrats!

8. Again, Welcome to FF!

Quoting Praveen Shan
Forex in Malaysia is illegal , if conducted by local institutions or institutions acting within Malaysia and its law.

If you were the setup a offshore bank acct and operate thru n offshore brokerage.Jurisdiction is not in one's country of residence. Therefore , it would be perfectly legal to trade , as long as you choose a country with no restrictions

Other things to look out for when choosing a country to start your trading acct; include income tax policy's , trading rules set by the governing board (eg its perfectly ok to hedge the same currency...
I'm not trying to convince anyone. I'm not in the "convincing" business.
BNM Press Statement on 25 June 2010, just for discussion, pls refer links below...

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=2076
Hi supeaceus. Congrats on your first post despite being a member since 2008.

1. The statement you point to has also been discussed. Please refer to earlier posts in this thread.

2. After reading this thread from the time that statement was released, you will see that it only refers to the interbank brokers in the wholesale interbank FX market (to which I personally belong to) and not the retail FX community (to which most of you all here belong to).

3. i.e. the above statement concerns institutional BANK TRADERS only.

4. Again, please read the thread from the beginning first before responding.

Quoting supeaceus
BNM Press Statement on 25 June 2010, just for discussion, pls refer links below...

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=2076
I'm not trying to convince anyone. I'm not in the "convincing" business.
1)Yes i just joined forex factory , infact I am new to this forum stuff. Which is why I assumed from the title of the thread 'Malaysia central bank states Forex is illegal,' that it is illegal in Malaysia.

2)I didn't have time to concern myself with reading all the posts as it is 2 time consuming, especially while day trading.So I am sorry if I had made any generalization based on an assumption 2 the title of this forum.

3)Logically you can't ban foreign exchange transactions, obviously individuals and institutions require these services to conduct business and for leisure.I had assumed ( i state again, assumed for which I am most apologetic) that most of us know this, but apparently not.

4) Too make myself more precise; as I should have and will do in the near future when making a post. I was referring to the average retail forex trader which will most probably be trading on a margin via a Fx brokerage.

5)Also with regard to the taxation issue, maybe you need to re-read the post.

'Other things to look out for when choosing a country to start your trading acct; include income tax policy's , trading rules set by the governing board...'

as I really have no idea what you were trying to convey in point 7.
Were you asking me for advice with regard to offshore tax policy's?If so, all I can think of is there should be countries that have a no capital gain tax policy on retail forex (you mite have to do more research on it) but i am sure it pays to be a resident of that country, as I am pretty sure moving large sums of money around the world is not feasible.

6)Again sorry for any assumptions made [I really don't have time to read the whole forum/trading takes up most of my day ]

Kudos 2 u Imran Yusof.






Quoting imranyusof
Hi Praveen.

1. I see you've been a member of FF for only less than 2 hours ago. Welcome!

2. Am not sure if you're familiar with proper forum SOPs, but I hope you've taken the time to read this thread from start to finish before commenting further to avoid the making of sweeping generalizations such as "Forex is illegal in Malaysia".

3. From your post, I take it your main concern is the legality of FX trading, jurisdiction, and taxation.

4. In point of fact, forex is not JUST for financial institutions in Malaysia. It is...
i think its also mainly due to the amount of forex and financial scams that have happened in Malaysia. particular in forex courses that over promise but sell strategies that are not really profitable
1. Hi Praveen. No worries.

2. re: tax policies, I had assumed you meant a situation whereby (for example) a Malaysian trader (wishing to avoid taxation in his own country) may wish to consider the income tax policies of the country in which his offshore broker is domiciled (for example, Australia), which I thought of as odd.

3. My understanding is Australia (for example) would not tax capital gains earned by non-citizens not living in Australia (eg, Malaysian nationals). i.e. Malaysians should only be taxed by Malaysians. And I don't know of any Malaysians being taxed by foreign governments for trading FX in their countries.

4. If I was mistaken in this or in what you meant when you mentioned tax policies, my apologies all round.

5. In any case, it's okay: there's no need to expand on what you really meant by it. I don't particularly need tax advice as I'm quite happy with my tax profile. My take on this is that traders should not be overly concerned with income tax as it's not really their biggest problem.

6. To clarify: My primary interest (as I'm sure is yours) is making money, but I also have the secondary interest in ensuring that misconceptions about how it's so "restrictive" for law-abiding citizens to trade in my country are quickly dispelled.

7. My apologies all round again if I misunderstood. Y'all have a profitable Friday!

Quoting Praveen Shan
1)Yes i just joined forex factory , infact I am new to this forum stuff. Which is why I assumed from the title of the thread 'Malaysia central bank states Forex is illegal,' that it is illegal in Malaysia.

2)I didn't have time to concern myself with reading all the posts as it is 2 time consuming, especially while day trading.So I am sorry if I had made any generalization based on an assumption 2 the title of this forum.

3)Logically you can't ban foreign exchange transactions, obviously individuals and institutions require these services to conduct...
I'm not trying to convince anyone. I'm not in the "convincing" business.
Hello Malaysian Friends

These two links are not related to tax (sorry for posting here) but I think you may like to know...

http://www.forexblog.org/2010/08/eme...t-in-2010.html

http://www.bloomberg.com/news/2010-0...ng-market.html

Cheers
Whats the deal in this forum? People keep bitching about changing rules in different jurisdictions and countries, just move your brokerage.

It's very easy to do, I learned here http://hunted.biz/

And now that I know I am ashamed it was so simple and I didn't know.
Thanks.

People who care so much about not paying taxes and hiding their trades from The Man (instead of worrying whether they're profitable or not) should find this info interesting.

As for myself, I will definitely save this info for future reference when it's my turn to be shady.


Quoting Hissst
Whats the deal in this forum? People keep bitching about changing rules in different jurisdictions and countries, just move your brokerage.

It's very easy to do, I learned here http://hunted.biz/

And now that I know I am ashamed it was so simple and I didn't know.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting Hissst
Whats the deal in this forum? People keep bitching about changing rules in different jurisdictions and countries, just move your brokerage.

It's very easy to do, I learned here http://hunted.biz/

And now that I know I am ashamed it was so simple and I didn't know.
Thank you for providing such easy to follow info.

I'm using a Swiss broker until now when i started my retails FX trading since 2006. The only thing most people did not consider a Swiss broker is the high minimum start up. The other thing being traditional paper work involved. I don't know about Austria but there is no capital gain tax in Switzerland. That's the most attractive part to me!

Cheers!

福 子 Victor V
Mr Imranyusof
Is trading online gold illegal in malaysia?
pls help
Quoting Yellowgold
Mr Imranyusof
Is trading online gold illegal in malaysia?
pls help
1. To be honest, I do not know.

2. I'm only familiar with domestic foreign exchange control rules with respect to FX (in general) and ringgit (in particular).

3. I THINK you may need a local license to trade PHYSICAL gold in this country. But, really, I don't know.

4. My opinion only: online trading of SPOT GOLD or CFD Gold (where the commodity is non-deliverable) with an offshore broker shouldn't be a legal problem as long as you are not PHYSICALLY handling the commodity and as long as the spirit of ECM 9 is maintained. But, really, I don't know.

5. I'm 99% SURE that there is nothing wrong with trading gold FUTURES via a margin account with a licensed futures broker (anywhere) within the context of ECM 9. But, really, I don't know.

6. Please check the current ECM 2 here: http://bit.ly/dfdFKK .
While you're there, you may wish to brush up on ECM9.

7. ECM 2 used to be known as "Dealings in Gold and Foreign Currency". Now it's known as just "Dealings in Foreign Currency". Why "gold" is struck out or whether gold is covered under some other statute, is anybody's guess. I have given you an "inch". You may wish to look for the "yard" on your own.

8. Sorry I can't be of much help. Commodity trading is not my cup of tea.

Good luck.
I'm not trying to convince anyone. I'm not in the "convincing" business.
One more thing.

1. Again, I have to remind. Just as it is for FX in Malaysia, it is illegal to place any monies (ringgit or otherwise) as a deposit in any domestic unlicensed gold (or any commodity) -based investment vehicle.

2. Anyone who does so after being so warned, thoroughly deserves to lose their deposit when the deposit vehicle goes down the toilet.

Quoting imranyusof
1. To be honest, I do not know.
I'm not trying to convince anyone. I'm not in the "convincing" business.
This thread helps me alot.
Im currently pursuing MBA and trying to write a paper in risk management about this in the spectrum of legality and security.

One questions,

Using proper remittance, like Maybank or RHB. How do transfer say, 10k USD to the brokerage account. Based on my limit knowledge,

1. Visa debit card - maximum 5k per day - instant
2. Online TT - maximum 10k perday - take at most 5 working days
3. Wire transfer - below 50k? - take 2-3 working days

the different between the first and the other 2 is, no question asked and minimum hussle tho you have to do it at least 7 days straight.

Any thaughts on this? or experience?
Quoting Yellowgold
Mr Imranyusof
Is trading online gold illegal in malaysia?
pls help
If you mean those online gold schemes that are pyramid like, then I definately don't know. In fact, I would be inclined to say that they are a scam. But I don't know...

And like Imran says, trading gold FUTURES via a margin account with a licensed futures broker is probably 99% fine.

So... please clarify what you mean by online gold.
My thoughts:

1. A person would have to be someone who is very sure of himself and/or someone with exceptional ability and track record to ever want to fund a margin account with USD 10k in one transaction. I salute that person if such was the case.

2. (I'm assuming the above transaction will be the initial funding for a NEW margin account?)

3. My question to this hypothetical person: Why must you even INVITE the inevitable questions from the authorities if you insist on testing the mandatory regulatory reporting limits?

4. (This person should check the limits on the BNM website. Perhaps an MBA grad student with no problem doing the necessary research can help him out.)

5. My next questions to this person: Are you in such a hurry to make more money with a bigger initial margin account? Is there any reason you cannot be satisfied to start with a smaller initial balance? Do you feel the market will run away from your entry level if you don't start with a higher margin account?

6. My further thoughts: By all means, go ahead and fund an account with 10k in a single deal. Nothing wrong with that. But if you want to avoid questions, then if takes a little bit longer to fund in batches, my question is : so what? Just tahan only lor...

7. Apologies all round for only offering my thoughts and not my experience. I have no experience in funding overly large amounts or maintaining overly large balances. I never leave a lot of money on the table. My two cents.

8. (I'm curious. What is the title of your paper? If I may ask)


Quoting freqzz
This thread helps me alot.
Im currently pursuing MBA and trying to write a paper in risk management about this in the spectrum of legality and security.

One questions,

Using proper remittance, like Maybank or RHB. How do transfer say, 10k USD to the brokerage account. Based on my limit knowledge,

1. Visa debit card - maximum 5k per day - instant
2. Online TT - maximum 10k perday - take at most 5 working days
3. Wire transfer - below 50k? - take 2-3 working days

the different between the first and the other 2 is, no question asked and minimum...
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting imranyusof
My thoughts:

1. A person would have to be someone who is very sure of himself and/or someone with exceptional ability and track record to ever want to fund a margin account with USD 10k in one transaction. I salute that person if such was the case.

2. (I'm assuming the above transaction will be the initial funding for a NEW margin account?)

3. My question to this hypothetical person: Why must you even INVITE the inevitable questions from the authorities if you insist on testing the mandatory regulatory reporting limits?

4. (This person should...
Thanks for the reply. I was hoping for it.

1. Definitely. Sadly, this isnt me, Im just giving a what if scenario. Having read previous post stating that using proper remittance BNM have no power to control what are you going to do with the money. But, based on my experience, with proper money management (say risking 2% every trade) with bigger margin account will give you better control. Sorry, but my trading experience is very limited.

2. Yes.

3. Again, im not inviting the authorities to snoop on my activities (if this is a real case). Im just asking wether if I ever go to the counter and hand in cold 35K cash to fund a new account, will the bankers push the red light and straight jump towards me screaming "GUILTY". If anyone have any experience in this.

4. I found BNM webbie isnt very helpful or very misleading as well as calling them to clarify some stuff. Totally giving me a hardtime explaining something. The only thing the person in charge can say is Yes or No.

5. Again, im no hurry to make big bugs. Plus, this is not a real case. Just a scenario for my writing (if i ever find enough sources to write this stuff really).

6. I have no problem waiting as well since i prefer not to be asked by some paranoid bankers and having to explain something they done even understand. Im not saying i have bigger brain than them, but u know lah, its very annoying.

7. Your 2 cent worth 2 million for me. =)

8. No worries. Im the phase of getting all the source first but It may sound like this " Currency Trading - Regulation and Security Risk", its under financial risk management subject.

I hope i did clarify that well.
1. From my experience, with proper money management, one can still make money AND have control, all the while maintaining a smaller margin account. I think it depends on how much of a hurry one is in wanting to make money. If one thinks one can have a wider stop-loss limit with a larger account, I think one is missing the point about trading for a living.

2. Banks are guided by KYC (Know Your Customer) policies. If a Bank is presented with a transaction that does not match the customer profile (race, employment status, usual banking activities etc etc), the Bank is obliged by the Anti Money Laundering Act (AMLA) to ask questions as to the source of the funds.

3. They will not refuse the transaction and (as far as I know) you are not obliged to tell the truth. But for the Bank, it's very simple. If they think you are bullshitting them, they will STILL do your transaction (because all they care about is the fee income) but at the same time, they will "red-flag" you to Bank Negara (without telling you) and the authorities will begin monitoring you (also without telling you). As the comedian says, "Lu pikir la sendiri."

4. If you operate within ECM9 thereafter, I SUPPOSE they will leave you alone. If you want a simple answer to the inevitable question bankers will ask, why not just say it's for "investment in foreign currency assets abroad" fullstop?

5. Let me re-iterate: there is nothing wrong with funding your margin account in the amount you describe... as long as your funds are not derived from such activities like e.g. running prostitutes or selling guns to religious zealots (without a license) etc etc.

6. I actually think the BNM website is pretty good. My opinion. They're not in the business of providing bullshit information. Maybe the reason you find it unhelpful is because you are not familiar with the legal language it uses or you're not really sure what info it is you're looking for? In that case, maybe you have a point. I've never had problems, though. So far.

7. The only thing not helpful about BNM is the phone-in helpdesk. Which is why I never bother talking to anyone and just focus on the Letter of the Law.

8. I think your MBA paper title is too general. Risk management for interbank players is not similar to risk management for retail FX players. My opinion.

Good luck with the paper.


Quoting freqzz
Thanks for the reply. I was hoping for it.

1. Definitely. Sadly, this isnt me, Im just giving a what if scenario. Having read previous post stating that using proper remittance BNM have no power to control what are you going to do with the money. But, based on my experience, with proper money management (say risking 2% every trade) with bigger margin account will give you better control. Sorry, but my trading experience is very limited.

2. Yes.

3. Again, im not inviting the authorities to snoop on my activities (if this is a real case)....
I'm not trying to convince anyone. I'm not in the "convincing" business.
There need to be clear cut directon for the sme
Quoting Greenmoney21
Hi,

Bank Negara Malaysia, just posted on their website saying that, those who trade currency from Malaysia its consider illegal.

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1976

Any comments guys?

I've been trading Forex as well, now with these kind of regulation, making me a little worried...
Thanks for the honest answer.

I personally agree with all of your point. But this goes down to trading experience. I cant yet match the seasonal trader here so I cant really say whats best or not.

The paper shudnt be too deep. Its just one of the subject and not my thesis since im doing course based instead of research based. I just wanted to explore just the tiny side of the risk involved in currency trading in the sense that where does it stay within the regulation and security zone.

Thanks a million still for taking your time answering.
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