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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

I like your answer for its perspective and backing up with logic reasoning.

So is it illegal if the forex brokerage firm make an offer for me to act as someone to trade for their client money? As in offering forex training courses, it is deemed illegal. Correct me if I am wrong.

Your last sentence does carry a heavy weight on the word "TRUTH". Well, it doesn't hurt if extra money can be made to supplement the less than decent earning one make in this industry. Furthermore, the IB stuff is still in the same pit one already in.
Quoting skenobi
{quote} Hmm.. just because I suggested "family office", doesn't mean you should seriously consider it (unless I misunderstood your meaning). To me, any act that exposes you to Inland Revenue Dept scrutiny is an act of stupidity. For a Malaysian retail FX trader, if your nose is clean and your actions are above board, then you have nothing to fear from BNM. It's the Inland Revenue guys that are a pain in the ass if they ever get their nosey snouts in your business.
Agreed on the IRD!
Why suddenly this issue crop up again. Any new development?
Does anybody know what is the criteria to open a bank account in Spore..
Quoting flowerhorn
So is it illegal if the forex brokerage firm make an offer for me to act as someone to trade for their client money?
If it's EXACTLY as you worded it, then yes, in Malaysia it would be illegal.

Quoting flowerhorn
As in offering forex training courses, it is deemed illegal.
Not necessarily illegal, if the marketing literature promoting the course says that the "information contained therein is made for educational purposes only". But if/when there is a solicitation for customer deposits at any point during the "course", that protection is hereby rescinded.

Quoting flowerhorn
Well, it doesn't hurt if extra money can be made to supplement the less than decent earning one make in this industry.
The above is your opinion. Real traders do not share that opinion.

I have to admit that I have selfish reasons for wanting the activities of IBs and ne'er-do-well forex trainers to be controlled or banned: It is THESE activities that draw unnecessary attention from the Authorities on the legal trading of law-abiding tax-payers (such as myself).

If or when the Authorities ban retail forex trading outright due to the illegal actions of a few below-average traders (who should know by now that trading is just not for them), then real traders like me will be very annoyed indeed.

Quoting flowerhorn
Furthermore, the IB stuff is still in the same pit one already in.
No, it is not.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Hi Skenobi, I must say that you have answer my questions to my very satisfaction and clear many of my doubt.

I can understand why you "dislike" the activities of IB and some forex trainers as when they actively soliciting people to go into forex trading more for their own benefits rather than the clients profitabilities, it will probably make BNM to put a blanket directive again on the industry which might make more difficult for genuine profitable real traders to trade.

Thanks a lot for your "high" views. Appreciate it a lot.
Anyone heard this rumour? Bank Negara is going to open up current restriction of forex trading for retail again. Tony Fernandes will start the first brokerage house. Leverage will limit to 50x only.
What do you mean by "again"?

Anyway, let wait for the rumour to become reality.
Quoting lithium1
Anyone heard this rumour? Bank Negara is going to open up current restriction of forex trading for retail again. Tony Fernandes will start the first brokerage house. Leverage will limit to 50x only.
I think you're talking about this story:
The Jet Set Comes to Forex – Tune Group Signs MOU With ADS Securities to Launch FX Platform

Interesting business model, and nothing about BNM doing what you described.

Anyways, there is no clear economic benefit to the nation for BNM to open up restrictions on retail FX, therefore I don't think anything will change.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Are we trade forex in malaysia?? Most of our broker is from oversea... lol...
Peace Yo!
It's only rumors, not from the news. Trading forex in Malaysia feels like selling pirated CDs. Haha.
Quoting lithium1
It's only rumors, not from the news. Trading forex in Malaysia feels like selling pirated CDs. Haha.

Not the same at all, really.

Trading forex legally is legal.

Selling pirated CDs is not legal and will never be legal.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Sorry if I am a little bit off topic. Talking about legality of trading Forex, I am wondering what about trading stocks, commodities, etc with an overseas broker. Does it have the legality issues like what Forex does?

If they don't, they why BNM put restrictions on Forex and not on stocks, commodities, etc?
Quoting superblack
Sorry if I am a little bit off topic. Talking about legality of trading Forex, I am wondering what about trading stocks, commodities, etc with an overseas broker. Does it have the legality issues like what Forex does?
You can trade NYSE-listed stocks (for example) with an NYSE-sanctioned broker, sure. You definitely cannot trade NYSE-listed stocks in NYSE with a broker that's only registered in Malaysia, can you? Likewise you cannot trade stocks listed in Malaysia (that is not listed on NYSE) using a broker that is not registered in Malaysia.

Final answer to your question: No. (I don't actively trade non-Malaysian stocks, but I do occasionally buy/sell non-Malaysian stocks and bonds)

Quoting superblack
If they don't, they why BNM put restrictions on Forex and not on stocks, commodities, etc?
You said "restrictions". Can you tell us all here what restrictions you mean that apply to forex and not to stocks and commodities? And please quote the exact references in the Malaysian statute books so that we can all address your concerns, otherwise it will be difficult to understand your concerns.

People who have read this thread from start to finish (it's only 18 pages) would know what is allowed and what is not allowed. Even if you are too lazy to read all 18 pages, I feel that even if you had read just the first 10 pages, your concerns (whatever they are) should already have been addressed.

Assuming you HAVE read the thread, is there anything at all that you have read in this thread that you are still NOT clear about? If so, let us know and I will try my best to explain. Again.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Thank you for the reply 'Skenobi'. I was referring to the BNM website, "http://www.bnm.gov.my/microsites/fraudalert/0203_forex.htm".

I am glad that there is no such thing for stocks, bonds, etc.

To clarify again, If I register with a US broker, trading NYSE listed stocks/commodities would be fine. Am I right here?
Quoting superblack
Thank you for the reply 'Skenobi'. I was referring to the BNM website, "http://www.bnm.gov.my/microsites/fraudalert/0203_forex.htm".
That alert refers to "foreign currency" (which refers to foreign currency CASH converted to and from ringgit). NOTHING to do with foreign currency assets as covered by BNM's ECM 9. If people engage in practices EXACTLY as described by the alert, then these people deserve to be clamped down on.

I believe this alert has been explained before in this very thread. If not, I stand corrected but still hope this question will not be asked again in future by someone else.

Quoting superblack
To clarify again, If I register with a US broker, trading NYSE listed stocks/commodities would be fine. Am I right here?
I have more or less already answered in my last post. The answer is yes, you are right here.

... as long as your transactions with this US broker is entirely in any currency OTHER than ringgit.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Hi Skenobi


So I concluded from all these is:-

1) I don't care whether is 10k RM/USD , 100k RM/USD , 1M RM/USD to deposit to offshore trading account, as long as you change it from MYR to USD with the local authorised dealer and declare it. Right? Since Its LEGAL

2) The returns/profit I made from trading Forex from offshore. I transfer it back to malaysia bank whether its RM10k, RM100k, or RM 1M . As long as I declare because Trading Forex is LEGAL. There is no way I'm going to get prosecuted and money was going to be freeze because its LEGAL.

I'm sorry I'm abit confused here because Skenobi you sounded so confident but yet you want to stay under the radar ( there is nth wrong with being low profiles ) but if its really legal like you said, we shouldn't be worried about money transfering in a large amount and declare it because its legal (Assuming you are trading for living and not money laundering for living )

With all the talking and debating here. Thats the conclusion I have here. Please make amend if I say it wrong.
Read the entire market, money is made on the main trend not the fluctuation
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...

The title of the thread and the ensuing OP is misleading at a minimum.

Quote
Under the Exchange Control Act 1953 (ECA), it is an offence for a person in Malaysia to buy or sell foreign currency or do any act which involves, is in association with, or is preparatory to, buying or selling of foreign currency with any person, other than an authorised dealer. It is also an offence for a person to aid or abet another person to buy or sell foreign currency with any person, unless the person is an authorised dealer.

They are not declaring FX illegal. They are simply alerting and warning you against currency transactions with bogus companies and unregistered dealers. This is a Consumer Protection statement, not a new law that prohibits you from trading FX with a registered (licensed) dealer.

Quote
Members of the public are usually enticed to attend such investment or training programmes with promises of quick and good returns. The modus operandi of such programmes have included:

That is Consumer Scam and Fraud Protection. Be grateful.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • Post #378
  • Quote
  • Edited Sep 9, 2014 5:04am Sep 8, 2014 8:35pm | Edited Sep 9, 2014 5:04am
Quoting Kofmaster
Hi Skenobi So I concluded from all these is:- 1) I don't care whether is 10k RM/USD , 100k RM/USD , 1M RM/USD to deposit to offshore trading account, as long as you change it from MYR to USD with the local authorised dealer and declare it. Right? Since Its LEGAL
Yes. Just declare using the "purpose codes" provided by the Bank you converted with.

Quoting Kofmaster
2) The returns/profit I made from trading Forex from offshore. I transfer it back to malaysia bank whether its RM10k, RM100k, or RM 1M .
Again yes. Just declare using the "purpose codes" provided by the Bank you converted with.

Call it Investment Proceeds or Gift or Consulting fee income or whatever the fvck it is you wanna call it. But just remember that the larger the amount (per transaction), the more likely that the Bank processing your inward funds will redflag you to Bank Negara (and possibly IRD) for future scrutiny.

Quoting Kofmaster
As long as I declare because Trading Forex is LEGAL. There is no way I'm going to get prosecuted and money was going to be freeze because its LEGAL.
Never, EVER, say or "declare" that your monies come from forex trading profits. ESPECIALLY if the amounts are large. You MAY be investigated for MANAGING OPM (Other People's Money) which is ILLEGAL in this country without a license (which you will never get). Or worse, you MAY be investigated for MONEY LAUNDERING (which I consider to be a more serious crime).

"INVESTIGATION" does not always lead to "SUCCESSFUL PROSECUTION" but it's enough to discourage you from making the stupid mistake of trying to bring in money ALL AT ONCE.... assuming they don't send you to PRISON already.

Quoting Kofmaster
I'm sorry I'm abit confused here because Skenobi you sounded so confident but yet you want to stay under the radar ( there is nth wrong with being low profiles ) but if its really legal like you said, we shouldn't be worried about money transfering in a large amount and declare it because its legal (Assuming you are trading for living and not money laundering for living )
My confidence comes from not being too lazy to do my own research. The fact that I have been trading for Banks for more than 15 years and know how to interpret exchange control laws also helps.

From my observation, people who want to bring in large amounts all at once belong to one of the following categories:

1. people who want to look and feel like bigshots. (hopefully you are not one of those. And believe me, such STUPID people do exist.)
2. people who are in such a hurry (for some reason) to pay cash for a big ticket item, like a house or expensive car (this is a valid reason, especially if you haven't been submitting large income tax returns lately and so paying cash would bypass all the loan application steps).

Even if you belong to the 2nd category, I discourage you as far as possible from bringing in money all at once. The long-term benefit of following my advice far outweighs the hassle (which isn't even a hassle if you had managed your cash flow properly in the first place).

I don't belong to either category. I don't buy big ticket items like real estate or fancy cars, nor do I want to LOOK like a bigshot (because I want to live my life quietly and not have a big bulls-eye on my back for thieves to aim at.)

Bringing in small irregular amounts at irregular times also has the added benefit of keeping me under the IRD's radar, since I also don't like to be audited. Any time spent under such regulatory scrutiny is time wasted that I do not have.

Hence my low profile. I prefer to remain cash rich so that if the racial tension sh!t hits the fan in Malaysia, I have enough to take care of me and my family in another country.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} Yes. Just declare using the "purpose codes" provided by the Bank you converted with. {quote} Again yes. Just declare using the "purpose codes" provided by the Bank you converted with. Call it Investment Proceeds or Gift or Consulting fee income or whatever the fvck it is you wanna call it. But just remember that the larger the amount (per transaction), the more likely that the Bank processing your inward funds will redflag you to Bank Negara (and possibly IRD) for future scrutiny. {quote} Never, EVER, say or "declare" that your monies come...
Thank you Skenobi for the prompt and comprehensive reply.

i understand very well what you mean.

I'm just like the rest of us here wishing trading forex is a legal business and doesn't have to worry a single thing about transfer matter.

i wanna propose a matter to deal with it and I wanna see ur opinion on it.

like you said trading forex in Malaysia is legal if you know how to interpret exchange act law ( which you do and I don't)
so let's say i'm a fulltime professional trader. i decided to transfer a substantial amount RM1m back to Malaysia.

im not guilty, I did not launder money or trade OPM. I'm clean. So I let them investigate all my trades. After all the hassle my money should be able to get through and back to my hand.

by doing this I'm officially conveying a message that I m a trader trading forex instrument for a living which they can't do nth to me for the current laws existing in Malaysia. Am I right?

1. Good things about doing this is the next time you transfer big amount again, you just have to declare and show them the prove,the transaction or trades you made to the authority who questions and done.

2. the only bad things I can think about is, during the investigation they lock you in the prison first. Or freeze ur offshore trading account ( I've no idea whether they can do that or not) not allowing you to continue what you doing. And if the investigation goes on for a year.3 years or 5 years then I'm really screwed.

the reason i proposed this is because if you are really a capable trader. Rm100k or higher is just small cake in forex business.
so why hides in the bush when you are really capable and capable of living fancy? I find it more hassles that if I want to transfer rm 100k and have to cut in to rm5k and transfer 20 times for a period.

I do agree with all the investigation and hassles you want to avoid. Nobody want hassles.

But let's just think about it
what do u think? Considering the pros and cons I suggested. Which might happen which might not. Do you think is feasible?
Read the entire market, money is made on the main trend not the fluctuation
Quoting Kofmaster
{quote} Thank you Skenobi for the prompt and comprehensive reply.
Well, don't thank me too soon. Perhaps I've not been comprehensive enough since all the questions asked in your most recent post are all easily answered had you really digested this thread in full, and you're still asking them.

Quoting Kofmaster
I'm just like the rest of us here wishing trading forex is a legal business and doesn't have to worry a single thing about transfer matter.
There's nothing to "wish". Forex trading is legal in Malaysia as long as you trade for yourself and not for other people. And there really is nothing to worry about transfers (generally speaking), as long the money was legally obtained/earned at source (in your case, legal in the country where your broker is located) and the money is not used for illegal purposes when repatriated home.

Quoting Kofmaster
like you said trading forex in Malaysia is legal if you know how to interpret exchange act law ( which you do and I don't)
Ignorance of the law is not an excuse when you get caught doing anything illegal. You should always research the legal aspect of any venture you wish to take part in. Don't be lazy.

Quoting Kofmaster
i decided to transfer a substantial amount RM1m back to Malaysia. im not guilty, I did not launder money or trade OPM. I'm clean. So I let them investigate all my trades. After all the hassle my money should be able to get through and back to my hand. by doing this I'm officially conveying a message that I m a trader trading forex instrument for a living which they can't do nth to me for the current laws existing in Malaysia. Am I right?
Why do you feel the need to "officially convey" any damned thing? The bank staff processing your transfer will just think you're just showing off, and nothing gets you red-flagged to Bank Negara fast for no good reason other than a show-off.

You can just declare your inward funds as "withdrawal of deposits from foreign financial institutions". I can't remember the code. Please Google "BNM purpose codes" yourself.

And don't be so cocky and assume "they" can't "do anything" to you. "They" can always freeze your domestic bank accounts (likely and very possible) for WHATEVER reason pending outcome of "investigations" and "they" may even liaise with their central bank counterparts overseas to freeze your source bank accounts (unlikely but still possible).

Quoting Kofmaster
1. Good things about doing this is the next time you transfer big amount again, you just have to declare and show them the prove,the transaction or trades you made to the authority who questions and done.
There's nothing "good" or "bad" about this. Just declare the purpose code on the forms if asked and keep quiet the rest of the time. No need to show your trades or imply that "I'm a profitable forex trader making lots of money". The bank staff processing your transfer don't give a shit about you. You're just another customer. And if you shoot your mouth at them as if they owe you good service, they might even just red-flag you out of spite.

Quoting Kofmaster
2. the only bad things I can think about is, during the investigation they lock you in the prison first. Or freeze ur offshore trading account ( I've no idea whether they can do that or not) not allowing you to continue what you doing. And if the investigation goes on for a year.3 years or 5 years then I'm really screwed.
They won't lock you up (unless you're Jason Bourne or running guns for AlQaeda or something) and they have no power to freeze your TRADING ACCOUNT (not bank account). And even if they CAN freeze your trading account (I repeat, they CANNOT), how would they know? Unless you were silly enough to TELL THEM!

"Investigations" will only start if you were red-flagged. And how do you get red-flagged? When you set the KYC alarm bells ringing at your Bank with your large amounts out of the blue. If you had really read this thread, you would know that KYC stands for "Know Your Customer". You should search through the thread again (it's only 19 pages)

Quoting Kofmaster
the reason i proposed this is because if you are really a capable trader. Rm100k or higher is just small cake in forex business. so why hides in the bush when you are really capable and capable of living fancy?
You are seriously asking this question?

No long-term good can ever come out by flaunting wealth to regulators. You don't have to believe me. Just go ahead and do whatever you want to do.

Quoting Kofmaster
I find it more hassles that if I want to transfer rm 100k and have to cut in to rm5k and transfer 20 times for a period.
I disagree. Maybe you just have the wrong banks to service you or your cash flow routine is not refined.

Quoting Kofmaster
I do agree with all the investigation and hassles you want to avoid. Nobody want hassles. But let's just think about it what do u think? Considering the pros and cons I suggested. Which might happen which might not. Do you think is feasible?
My suggestion: Do it your way for now, and see what happens.

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