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Malaysia central bank states Forex is illegal

  • #61
  • Jan 10, 2010 2:35am Jan 10, 2010 2:35am
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
If Im quitting it I wouldn't even bother coming here to raise this issue. There are many options which I am considering. I have been having heated arguments with BNM people and have cornered them with many questions. They are not able to answer me a single one. Their most ridiculous answer to why I am not allowed to do what I wish with my own money is that they are "too worried" that if I am cheated by the broker who are overseas, then there is no way BNM can help me. I said to them,
Quote
you worry too much. The only help you can give is not to interfere in my affairs. What I do with my money is none of BNM's business
to which they replied that its still not allowed because it is against their rule which states that only listed and approved dealers are allowed. And these so called dealers are nothing but the banks.

So the bottom line is the govt doesn't want us to trade and make a profit because it wants these banks and most are govt linked to make the profits. Like Proton Sucka is protected to make it survive. Its not a fair deal at all but that is the bottom line. Unless we apply pressure there is nothing that you and I can do about it. We need to tell the govt to butt off from this evil scheme of only allowing the banks to trade. If other countries are legalizing it, there is no reason why Bolehland should not.
I have seen the enemy, and it is me.
  • #62
  • Jan 10, 2010 3:16am Jan 10, 2010 3:16am
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Those of you having any doubts in this issue, PM me your email address and I can write again to BNM and CC all of you so that this matter can be put to rest once and for all. You can see the reply directly from BNM. It is not my policy to argue with fools and waste my time. Lets hear what BNM has to say if you still dont understand what their clear guidelines are. I think the guidelines are already clear enough and people understand them. The problem is they cannot accept it. Too bad if that is the case.

Anyway, anyone interested PM me your email address. Ada berani?
I have seen the enemy, and it is me.
  • #63
  • Jan 10, 2010 3:38am Jan 10, 2010 3:38am
lol worse to worse just dont reside in malaysia. lol


*finding pr/job for another country
  • #64
  • Jan 10, 2010 4:42am Jan 10, 2010 4:42am
Let's consider the following scenario...

Let say a Malaysian converts RM to USD (Of course below RM50k threshold that permitted by BNM) through the authorized banks, and then the USD is remitted into foreign bank.

However the USD need to be converted into EUR for some reasons. So do this transaction considered as illegal? Do they need to report to BNM about this transaction? No right? Dont say that this transaction is not a trading. It is a trading as long as it involves buy/sell of currencies.

Personally I think what Imran said make sense. What we do with our USD is our business. The illegal stuff is the illegal forex trading schemes that collect money from public. I can say that 99% of them is a scam. And those who complaint to BNM were actually the greedy uneducated public who lost big money instead of making easy money. Just look at the con jobs that happened in Malaysia every years then you know it is so easy to cheat Malaysian!

I think there is nothing to worry. We just a small fish prawn crab only...it will take a huge efforts and resources to track the purpose of all small transactions. As long as we invest lesser than RM50k then it will be considered as legal automatically.

If you guys really worry then you can simply put your money in our lousy stock market.
  • #65
  • Jan 10, 2010 7:29am Jan 10, 2010 7:29am
Quoting ForexQuant
Let's consider the following scenario...

Let say a Malaysian converts RM to USD (Of course below RM50k threshold that permitted by BNM) through the authorized banks, and then the USD is remitted into foreign bank.

However the USD need to be converted into EUR for some reasons. So do this transaction considered as illegal? Do they need to report to BNM about this transaction? No right? Dont say that this transaction is not a trading. It is a trading as long as it involves buy/sell of currencies.

Personally I think what Imran said make sense....
Hiya peeps ,

Forexquant , we do have the same views after all. I'm also have been emailing BNM and in the process of compiling their answers to be put up at the forums later .

And based on the above , we will rationalise whether we will really need the PPMM or not . I have also enlisted helps from Lawyers friends ( that do not trade ) and asking their opinion on the matter .

Have a good faith in the matter and we will presevere . No need for harsh words / negativity and trying to be funny . And certainly no Robin Hood - ness needed .

Having said that , everybody is entitled to their own opinion and i wish we will have a positive resolution on this matter soon .

Good trading all .
  • #66
  • Jan 10, 2010 8:04am Jan 10, 2010 8:04am
REMEBER,i am not a LAWYER,BNM officier,and i try to discuss this in LOGIC.

legal or illegal in depend on the cashflow process,let split the cashflow process into 2 part,1st part is "bank wires" and 2nd part is "trading"


1st part is "bank wires"
once your dealer of forex is not on the list (http://www.bnm.gov.my/index.php?ch=1...97&ac=606),you are against the laws.

i assume many malaysia trader is open an trading account from a non-malaysia based broker ,and once you are using any dealer of forex on the list for bank wire to the broker, you are legal.

because once the dealer found out that your bank wires is illegal, they will reject the bank wire process.

###example,you open an account from forex.com,and using maybank(on the list) for bank wire to forex.com,you are legal in "bank wire",because maybank is Authorised Dealers of Foreign Currency.



2nd part "trading"
assume your broker is non-malaysia based company and located outside malaysia,and you trading forex
1)your trading order is execute out of malaysia,malaysia law cannot apply on other country.
2)there is a privacy agreement with the broker,BNM cant review your trading records,and none of business for BNM to do with your money.

the whole trading process is NOT WORK UNDER MALAYSIA LAWS.


if your broker is malaysia based company or non-malaysia based company but have a branch located in malaysia,MALAYSIA LAWS MAY APPLY ON TRADING PROCESS.(just likes "bank wire" process)

you put money in malaysia based company and then company exchange currecy,and the company is not on the list(http://www.bnm.gov.my/index.php?ch=17&pg=697&ac=606), you illegal.

but,if the company using the dealer on the list to exchange forex,you should be legal.

liteforex is russian based company,but have branch in malaysia,they should be obey malaysia laws,so, for liteforex user better ask them the trading process.

***all the thing i wrote is based on logic,not law.correct me if i am wrong,thank you.
  • #67
  • Jan 10, 2010 9:08am Jan 10, 2010 9:08am
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
This is Bolehland, where law sometimes can be opposite to logic. Anyway, I also started in Forex like the rest of you which is thinking that trading for individual account for own-self is perfectly OK and legal. This is just like own investment overseas and so should be OK. That is what I was thinking all these while, believe me. I was no different from you all. But according to the latest info, that is far from the truth. BNM actually doesn't allow any trading at all for all residents except banks. I know this is damn unfair but that is what BNM is saying plain and simple. I also am equally surprised that not many - in fact not a single trader from Malaysia is willing to acknowledge this fact. They are in denial mode and I dont blame them. Seriously I cannot blame anyone for thinking otherwise. Its because its so damn unfair, many people are inclined to think that what is so obviously stated by BNM couldn't possibly be true. So they adamantly hold tightly to the belief that individual trading is still OK, only the "other illegal" scams are illegal. They refuse to even entertain the thought that "any resident trading forex thru Internet is not allowed" meaning to say its now illegal.

Well, like I said I dont want to waste time trying to convince them. Let those who think its fine and "$emuanya OK" go on thinking its OK. I think I will be only wasting my energy trying to convince. So this message is not for them. Please go right ahead with your thinking and I apologize for taking your attention. Just ignore what I wrote. However, if there are those who share what I am saying, then we can work together to do something about this. PM me. Lets not disturb this thread. Lets continue separately.

This shall be my last message on this thread. Cheers!
I have seen the enemy, and it is me.
  • #68
  • Edited 9:24am Jan 10, 2010 9:10am | Edited 9:24am
Quoting wormboy
this is old news.
and remember, kalau dah illegal, why would the authorities allowed world forex expo inviting foreign brokers at kl june 2009?
read and understand the rules bnm had stated. Jangan cepat melatah, bikin malu Malaysians saja.

Plus, if you're not trading someone else's money or involved in the schemes as mentioned you have nothing to worry about.

Trade safe everyone
Probably some of you are new thus not realising this issue is not new.
bnm is just repeating what they issued back in 2008.
If you are not involved in the scams/schemes which were mentioned, there is nothing to worry about. Welp, at least that's what I think. If you choose to worry & ball over the matter that's your problem.

Link from 08:
1. http://www.utusan.com.my/utusan/info...h&pg=ma_01.htm
2. http://www.bnm.gov.my/index.php?ch=104&pg=456&ac=550

Okay good luck fellas, let's make some money
Thank You
  • #69
  • Jan 10, 2010 9:35am Jan 10, 2010 9:35am
Quoting EdgarNg
lol worse to worse just dont reside in malaysia. lol


*finding pr/job for another country
extreme sangat tu edgar
would be easier to have an overseas account in Thailand/Singapore for withdrawal purpose from ib. Then transfer from that same overseas account to your personal account. As long as there's no "inwards tt from **llc" when transfering inwards no questions can be asked.
Thank You
  • #70
  • Jan 10, 2010 9:47am Jan 10, 2010 9:47am
I agree and disagree with some of Jey's points.

1. In my 14 years-or-so trading forex, I observed (from my dealings with BNM) that sometimes BNM's left hand doesn't know what its right hand is doing.

2. i.e. BNM's guidelines are not always clear. If they were clear, BNM would not issue ECMs to supercede prior rulings. Exchange control Acts should always be read concurrently with the latest exchange control measures or circulars.

3. The recent BNM press statement were not related to exchange control issues. It was related to illegal forex investments i.e. there IS such a thing as "legal" forex investments (refer to ECM9)

4. Where I somewhat agree with Jey: I agree that those who cannot convince themselves that what they are doing is legal, should check with BNM themselves.

5. (I hope Jey would not take it the wrong way if I also suggest they do not give him their email addresses for security reasons. Not out of fear of BNM but to prevent their email addresses from falling into the hands of spammers and trolls. I'm sure Jey can give his assurance that their emails are secure. But one can never be too sure about that sort of thing....)

6. If the doubters check with BNM, I'm quite sure BNM will give them the same run-around saying all those things Jey says they did. For one reason: they don't want you to trade forex! Especially for the reason that Jey found so ridiculous: that BNM is worried about investors being cheated etc etc etc. And I agree that it's ridiculous.

7. For the rest of us who
- understands the difference between "foreign currency" (which is physical CASH), "foreign currency ASSETS" (which is just a number in a bank account), and "foreign currency instruments";
- took the time to understand the implications of ECM9;
... SHOULD, by right, be secure in the knowledge that what they are doing is ok.

8. They should not be concerned about fighting to be "right". Let other people worry about that. We should be more concerned about making money and keeping the financially-unready traders out of our trading business.

9. I hope Jey will continue with his crusade for more BNM disclosure on behalf of those who are not sure. I think he is doing them a great service.

10. As for the rest of us who are already convinced, I'm sure they will continue to trade like business as usual.




Quoting Jey
Those of you having any doubts in this issue, PM me your email address and I can write again to BNM and CC all of you so that this matter can be put to rest once and for all. You can see the reply directly from BNM. It is not my policy to argue with fools and waste my time. Lets hear what BNM has to say if you still dont understand what their clear guidelines are. I think the guidelines are already clear enough and people understand them. The problem is they cannot accept it. Too bad if that is the case.

Anyway, anyone interested PM me your email...
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #71
  • Jan 10, 2010 9:55am Jan 10, 2010 9:55am
Lot of confusion going on regarding exatly what is forex trading.

if you go to any bank and ask them what is Forex Trading...they will tell you Buying and selling of Currency is Forex Trading and Only Authorised dealer are allowed to Buy/sell currency.
this above discussion is for Currency which have physical existance like EUR or USD or JPY....
.......................

Now what is EURUSD ?...is it Physical Currency ? answer is No...EURUSD is not currency...

EURUSD is Fx Premium Security.

what is What is Premium Security ?

below is extract from one site read it carefully http://premiumsecurity.anandrathi.co...remiumSecurity

---------------------------------------------
Premium Securities are financial derivative trading products. Their prices are derived from the prices of their underlying financial instruments. The underlying of a Premium Security is an asset, index, or even another derivative, such that the cash flows of the derivative depend on the value of this underlying.
When you buy or sell Premium Security, you will not physically own the underlying instrument. With Premium Security, you are gaining exposure to the direction of the future price movement in an underlying instrument. You actually hold a contract with Spread Co to buy or sell a Premium Security paying the Investment Amount and on selling the same investment, receive the sale proceeds (if any).
Pricing

Premium Securities are priced almost identically to their underlying instruments. They are typically quoted on a spot basis. Premium Securities prices move in real-time as the price of their underlying instruments move on the relevant exchange they are quoted or in the inter-bank market.
The Spread

The spread, also known as the dealing spread or the Buy/Sell spread, is the difference between the buy and sell rates at which you can buy and sell Premium Securities.

-----------------------------------------------------------------

Broker like FXCM or FXDD or any broker in this catagary offer you "Fx Premium Security" trading ....That is Pair EUUSD. GBPUSD......

You hold your trading accout wth broker in base currency ( like EUR, USD, GBP...) .......say broker offer leverage 1:100 .....when you BUY EURUSD, 10K lot , broker charge you 100$ and deduct it from your accout..when you sell back EURUSD broker give back 100$ and respective profit/loss happen during this trade.
in this transaction you invested in EURUSD Fx Premium Security, hold this investment and then sold this investment...

hope you understand what is Forex trading.
you can read more from here http://premiumsecurity.anandrathi.co...oreignExchange

if goverment clearly say "you can not trade any instruments whos underlying asset is Currency" then it will be illegal to trade EURUSD..... Goverment make all rules releted to there currency...in case of Malaysia it is RM......and they will not make any comment on EURUSD since EURUSD underlying asset currency is EUR and USD and not RM.
so loop hole formed
  • #72
  • Jan 10, 2010 10:08am Jan 10, 2010 10:08am
1. I agree we should not force this issue with BNM.

2. Don't forget that BNM controls the "tap" (via ECM9). If people push the issue hard enough, BNM might just close the "tap" by issuing another circular to further refine that ECM in a way that is not in favor of honest forex traders like you and me. AFAIK, there is no circular that supercedes ECM9, so far, and I thank God for that.

3. I also re-iterate that having any organized grouping of traders is NOT a good idea. We should just let the issue blow over as it usually does. Don't forget that this is not the first time this issue has cropped up.

4. Even complaining about it in the Press is a bad idea. It makes BNM look bad and you DON'T want to do that.

5. BNM is already doing the experienced traders a favor by not hassling them before this. We should not be so kancheong (is dat the correct spelling?) when all BNM is doing is going after the illegal deposit-taking scammers and the so-called "introducing brokers".


Quoting hewtwok
Well, first of all...i don't think we breach any ECM/BNM regulations

1. We TT our $ from our local bank legally and within the BNM limit

2. We DID NOT BUY/SELL any foreign currency when we trade through our brokers BECAUSE we are not buying/selling foreign currency at all ...what we are doing is more like spread betting or whatever u call it....there is no physical currency involved.

Imagine some brokers allowed GOLD trading or even OIL trading. You buy 1 lot...but do u actually consider yourself a GOLD/OIL trader??? U don't physically own...
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #73
  • Jan 10, 2010 10:17am Jan 10, 2010 10:17am
Bro. EXACTLY!



1. BNM only gives a sh!t about ringgit movement.

2. Just don't trade against the ringgit!

3. Convert your ringgit LEGALLY to USD (within scope of existing rules), and then after that, what you do with your new asset is your own business.

4. It's only when countryside yokels (who lose their life savings to unscrupulous people) complain to BNM that these issues get out of hand.

Quoting ramdas
Lot of confusion going on regarding exatly what is forex trading.

if you go to any bank and ask them what is Forex Trading...they will tell you Buying and selling of Currency is Forex Trading and Only Authorised dealer are allowed to Buy/sell currency.
this above discussion is for Currency which have physical existance like EUR or USD or JPY....
.......................

Now what is EURUSD ?...is it Physical Currency ? answer is No...EURUSD is not currency...

EURUSD is Fx Premium Security.

what is What is Premium Security ?

below is extract...
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #74
  • Jan 10, 2010 10:19am Jan 10, 2010 10:19am

Dear imranyusof,

Thanks for posting your knowledge, i read your all posts carefully and increased my knowldge in this area related to this thread.

Best Regards
Ramdas
  • #75
  • Jan 10, 2010 10:42am Jan 10, 2010 10:42am
Quoting asri
Hiya peeps ,

Forexquant , we do have the same views after all. I'm also have been emailing BNM and in the process of compiling their answers to be put up at the forums later .

And based on the above , we will rationalise...
Like Imran mentioned just now, I think it is better not to blow this small news into a big news that forced BNM to do some major actions. Just let it go. Sooner or later it will be ONCE again sapu below the carpet. Dont you agree?
  • #76
  • Jan 10, 2010 12:56pm Jan 10, 2010 12:56pm
THANKS EVERYONE! you guys have given very valuable inputs in this matter, now i can fully concentrate on forex trading.

Yes wormhole i take trading seriously, haha. dont mind me.
  • #77
  • Jan 10, 2010 6:34pm Jan 10, 2010 6:34pm
Quoting ForexQuant
Like Imran mentioned just now, I think it is better not to blow this small news into a big news that forced BNM to do some major actions. Just let it go. Sooner or later it will be ONCE again sapu below the carpet. Dont you agree?
Ok bro ,

We'll just let it go . . I also against those scammers that brings bad rep to our trading community . Having said that i acknowledge there are some very helpful people out there indeed . . Thanks peeps .

I do hope Jey continue his crusade against the BNM and let us know whats the latest happenings ... Keep it up bro .

Good trading all ...
  • #78
  • Jan 10, 2010 8:00pm Jan 10, 2010 8:00pm
imran, as usual, i agree with u together with ForexQuant...

this issue will blow over and like what ever other important issue. kita cepat lupa.

i believe bnm pun cepat lupa.
  • #79
  • Jan 10, 2010 8:05pm Jan 10, 2010 8:05pm
Bro Asri. Thanks heaps!

Let's just sit tight for now and see where this issue goes. But don't stop making money laaaa..

Chances are this will blow over and we'll all wonder what the fuss was all about.

At the same time, I'm hoping that press article about disgruntled retail FX traders in the Star last Saturday (?) didn't ruffle any feathers upstairs.

*fingers crossed*


Quoting asri
Ok bro ,

We'll just let it go . . I also against those scammers that brings bad rep to our trading community . Having said that i acknowledge there are some very helpful people out there indeed . . Thanks peeps .

I do hope Jey continue his crusade against the BNM and let us know whats the latest happenings ... Keep it up bro .

Good trading all ...
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #80
  • Jan 11, 2010 1:01am Jan 11, 2010 1:01am
Quoting asri
Bro ,

Could you be more specific regarding publish dates ? Or better still , point us to an online version ...
Bro ive attach the link for ur perusal. Do check & distribute it...

http://biz.thestar.com.my/news/story...1&sec=business
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