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Forex trading is illegal in India? 29 replies

Forex trading in Malaysia 1 reply

Forex trading illegal in Malaysia? 0 replies

will forex trading be illegal? 6 replies

Attachments: Malaysia central bank states Forex is illegal
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Malaysia central bank states Forex is illegal

Quoting victoryong
Well, I see no harm exploring the option. At the end, if its not suitable, will still revert back to retail investor status. First time hearing about "family office", getting a little 'itchy' now.. {quote}
Well, if you actually ENJOY being audited by the IRD, by all means, go ahead and scratch that itch.
I'm not trying to convince anyone. I'm not in the "convincing" business.
I have actually read the whole thread. However, I needed some clarifications.

The reason why I wanted to have a company or the so called "family office" is because I believe if I could form a company which only trades Forex, it means that BNM could not do anything to me as Suruhanjaya Syarikat Malaysia (SSM) has allowed me to form such a company (If SSM approves). That means Forex is totally legal, if not SSM will not approve in the first place. I am not trying to evade taxes. I am okay with paying taxes. And I will not take any deposits or investments from others. I am afraid of individual trading because it is very unclear as to whether it is legal or not. As far as this thread goes, I understood that it is illegal, however BNM will not 'disturb' you as long as you do it 'quietly' without taking any deposits from others. But that is not enough, I want to legalise it.

For the second scenario, This is what I actually wanted to know, let's say I am transferring money from Singapore to Malaysia legally, through banks. I transferred SD 100,000 this month (assuming it exceeded the limit). The bank in Malaysia will inquire you. I would tell them that I got the money from Forex trading which I have been doing in Singapore. In this case, can the BNM take action against me?
I can see that you got some issues with IRD Well, if I need to pay tax, I'll gladly do so. And if I plan to move forward with the "family office" concept, I'll definitely get written clarification from IRD or get professional help on the subject matter before executing the plan.

Quoting skenobi
{quote} Well, if you actually ENJOY being audited by the IRD, by all means, go ahead and scratch that itch.
On the 2nd scenario, you may want to talk to a subject matter expert on it. Can always go to a banker and ask them what are the procedure and limit are.

Quoting superblack
I have actually read the whole thread. However, I needed some clarifications. The reason why I wanted to have a company or the so called "family office" is because I believe if I could form a company which only trades Forex, it means that BNM could not do anything to me as Suruhanjaya Syarikat Malaysia (SSM) has allowed me to form such a company (If SSM approves). That means Forex is totally legal, if not SSM will not approve in the first place. I am not trying to evade taxes. I am okay with paying taxes. And I will not take any deposits or investments...
Hi superblack,
I PM'ed you on fund transfer information.

Cheers.

Quoting superblack
I have actually read the whole thread. However, I needed some clarifications. The reason why I wanted to have a company or the so called "family office" is because I believe if I could form a company which only trades Forex, it means that BNM could not do anything to me as Suruhanjaya Syarikat Malaysia (SSM) has allowed me to form such a company (If SSM approves). That means Forex is totally legal, if not SSM will not approve in the first place. I am not trying to evade taxes. I am okay with paying taxes. And I will not take any deposits or investments...
Quoting victoryong
Hi superblack, I PM'ed you on fund transfer information. Cheers. {quote}
Thank you Victoryong. I believe that the best and safest solution is to migrate to Singapore and trade Forex there until the Malaysian government recognises Forex trading. Then we can bring all our money back after that.
Quoting superblack
I have actually read the whole thread. However, I needed some clarifications. The reason why I wanted to have a company or the so called "family office" is because I believe if I could form a company which only trades Forex, it means that BNM could not do anything to me as Suruhanjaya Syarikat Malaysia (SSM) has allowed me to form such a company (If SSM approves). That means Forex is totally legal, if not SSM will not approve in the first place.
Don't assume BNM cannot touch you for anything. SSM does not over-ride BNM. To my mind, SSM just collects company incorporation fees and to hell with everything else.

Quoting superblack
I am not trying to evade taxes. I am okay with paying taxes.


Quoting superblack
I am afraid of individual trading because it is very unclear as to whether it is legal or not. As far as this thread goes, I understood that it is illegal, however BNM will not 'disturb' you as long as you do it 'quietly' without taking any deposits from others.
If you had REALLY read the thread from start to finish AND read the local statutes AND read the BNM Exchange Control Measures (especially ECM 9) AND understood everything, you will know that individual forex trading is NOT illegal. Clearly you probably need to read the thread again carefully instead of just browsing thru (or so it seems).

Quoting superblack
But that is not enough, I want to legalise it.
Legalizing anything is not up to you. Only Parliament can do that.

Quoting superblack
For the second scenario, This is what I actually wanted to know, let's say I am transferring money from Singapore to Malaysia legally, through banks. I transferred SD 100,000 this month (assuming it exceeded the limit). The bank in Malaysia will inquire you. I would tell them that I got the money from Forex trading which I have been doing in Singapore. In this case, can the BNM take action against me?
The Banks won't ask you verbally. They will make you fill in a form to declare your source in the form of a "purpose code". This form they will pass on to BNM for archiving and/or action. One of the codes (if not mistaken) is for "Other Investments" or "Investment in Foreign Currency Assets". Again, what kind of action do you expect BNM to take against you and for what crime? (assuming you had really read the thread carefully)

If anything, BNM will probably not nail you for forex, but will probably investigate you for money laundering, which is FAR MORE SERIOUS than forex trading.

Firstly, am happy that you are so successful that you can transfer SGD 100k at will.

But let's not let all that money make you do silly things. Just transfer below the limit every time (if not mistaken RM 10K) and you don't have to declare a damned thing.

FYI... these exchange control rules are not peculiar to Malaysia alone. Even advanced economies like the US and the UK (and even Singapore) has them and just as strict (to some people anyway, but not to me).
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting superblack
{quote} Thank you Victoryong. I believe that the best and safest solution is to migrate to Singapore and trade Forex there until the Malaysian government recognises Forex trading. Then we can bring all our money back after that.
Forex trading does not need to be "recognized" by the Malaysian government to be legal in Malaysia. I believe you only have that impression because no retail forex broker has ever been given a license to operate in Malaysia.

The ECMs already facilitate forex trading.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting victoryong
I can see that you got some issues with IRD Well, if I need to pay tax, I'll gladly do so. And if I plan to move forward with the "family office" concept, I'll definitely get written clarification from IRD or get professional help on the subject matter before executing the plan. {quote}

LOL... I've never been audited (*knock on wood*) for such things as I've always stayed comfortably under the radar. Some of my counterparts have not been fortunate after they make the (what I would call) egotistical mistake of wanting to declare to the whole world, "Here I am, World! I just made a lot of money trading forex! I'm the best trader in the whole wide world!"

My question to people like you is still unanswered: What benefit does making such a declaration (via incorporating as a company or "family office") give you vs just trading quietly?

superblack seems to think it "legalizes" the trading activity, and I've already shot down that concept.

So what other benefit could there be?
I'm not trying to convince anyone. I'm not in the "convincing" business.
You have a good point.

Quoting skenobi
{quote} LOL... I've never been audited (*knock on wood*) for such things as I've always stayed comfortably under the radar. Some of my counterparts have not been fortunate after they make the (what I would call) egotistical mistake of wanting to declare to the whole world, "Here I am, World! I just made a lot of money trading forex! I'm the best trader in the whole wide world!" My question to people like you is still unanswered: What benefit does making such a declaration (via incorporating as a company or "family office") give you vs just trading...
As far as I've understood and read in many articles and regulations/laws, Malaysia will not stop its citizen from investing in Spot Forex as long as (1) your an individual retail trader, (2) transfer funds using legal means, (3) do not trade against MYR, and (4) don't manage money/assets of others without license.

Quoting superblack
{quote} Thank you Victoryong. I believe that the best and safest solution is to migrate to Singapore and trade Forex there until the Malaysian government recognises Forex trading. Then we can bring all our money back after that.
Hi superblack,

you need a asset-mgmt license in M'sia in order to start up a company with the intention of soliciting public funds.

otherwise, do it like everybody else........ private retail trader with private investors under soft-loan agreement.

the small-timers usually have profits banked into their local bank a/cs. modus operandi.

either that, or u can have a foreign bank a/c down south in SG & travel to withdraw profits every once in a while.
Quoting victoryong
Hi superblack, I PM'ed you on fund transfer information. Cheers. {quote}
victoryong,
mind to pm me as well.... tq
Well, I am not a law savvy person. Therefore, I felt like Forex is a grey area between legal and illegal. I hope what Mr. Imran says is true. I didn't mean to disbelieve you, but after so many people came up with so many contradictions, I started to doubt. Anyway, as for now, I could trade happily as my equity is still low. The 100k was just an example.
Quoting kardelkew
Hi superblack, you need a asset-mgmt license in M'sia in order to start up a company with the intention of soliciting public funds. otherwise, do it like everybody else........ private retail trader with private investors under soft-loan agreement. the small-timers usually have profits banked into their local bank a/cs. modus operandi. either that, or u can have a foreign bank a/c down south in SG & travel to withdraw profits every once in a while.
I know it is quite difficult to get an asset-management license in Malaysia unless you are close to some politicians. Do we really have to travel to Singapore for transactions? I believe that online transaction would be more convenient, just get it transferred to our local bank account.
Quoting superblack
Well, I am not a law savvy person.
Well, ignorance of the law is not an excuse if you get caught breaking it. Ask any lawyer and he can confirm this. As a law-abiding citizen in any country, you are expected to do your homework before starting any legislated action.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Hmmm... seemed to be that retail forex trading in Malaysia is not encouraged. I see it as in the gray area. Trade your own money and stay low...stay under the rader.
?
This brings up an interesting question. If forex trading is not exactly "illegal" but it also not "encouraged, where does an IB( Introducing Broker) stand? Illegal ?

I believe forex trading training is not legal. Am I correct? If yes, I still see one company continuing offering them. SO are they doing some thing against the law ?
Quoting flowerhorn
Hmmm... seemed to be that retail forex trading in Malaysia is not encouraged. I see it as in the gray area. Trade your own money and stay low...stay under the rader. ? This brings up an interesting question. If forex trading is not exactly "illegal" but it also not "encouraged, where does an IB( Introducing Broker) stand? Illegal ? I believe forex trading training is not legal. Am I correct? If yes, I still see one company continuing offering them. SO are they doing some thing against the law ?
The answers to the questions you're asking would not matter to serious traders who are comfortable making money purely from trading and not from IB commissions or training fees. If you're a serious trader, it should not matter to you if an IB or a training company is operating legally or otherwise. You COULD just let the authorities deal with them and you could just go along your own merry way, trading quietly. Don't you think so?
I'm not trying to convince anyone. I'm not in the "convincing" business.
Well, let me put it this way.

Recently I am being approached by a brokerage firm to act as an IB. It seems quite an attractive proposition to me until I consider the "forex trading legalities" in Malaysia. Does making some money out of other people trading is an illegal act here? The more I think of it, the more I think it is a "crime".
Quoting flowerhorn
Does making some money out of other people trading is an illegal act here?
Being a retail FX broker without a license (which will NEVER be issued for as long as it does not presently exist within the Malaysian sphere of influence as far as forex is concerned) is illegal in Malaysia.

Being an IB, however, is probably not illegal (unfortunately). If an IB only makes commissions from introducing clients, I don't see how that's illegal. But if an IB is caught directly handling investor funds, it is possible to prosecute that IB for any number of "crimes" including trading for other people without a license (which will never be issued), or money laundering (which is worse).

There is also the risk of the broker going out of business, in which case the IB will be the convenient target for disgruntled customers and possibly opportunistic politicians and government executives wanting score political points.

The point I'm trying to make: being an IB is only "an attractive proposition" to so-so or below-average traders who don't have the chops to make a success out of trading their own money.
I'm not trying to convince anyone. I'm not in the "convincing" business.
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