Malaysia central bank states Forex is illegal

No. if they probe, they nid to prove that i do trade, not otherwise.
We follow the UK law, where ppl is innocent, unless proven guilty.
Unlike in taiwan, ppl are guilty unless proven innocent.

2ndly, The question is did i trade in Malaysia or in US? If i trade in US, can Malaysia govt prosecute me? If u apply the same theory and think, if i killed a Malaysian in US, will Malaysia or US prosecute me? It's US, not M'sia.

U may also be said to be trading u Malaysia, since ur pc/internet is in Malaysia and ur instruction is from malysia. But ur a/c and transaction all happen in US. So the big question is are u trading in M'sia or US? (i dunno the answe as well.
If ur trading in US, Msia cannot prosecute u, unless with collaboration with the US govt, highly unlikely. Bare in mind trading in US (in fact maybe all major countries, except for M'sia) is legal!!

Hi All fellow MYians,

I was thinking of venturing into the fx market, untill recently heard BNM issued a secular statement of prohibiting FX activities. Thus prompted me to scrutinise on the legality of the issue and bumped into this thread. First thing first that we all know These FX HYIP schemes have already painted an ugly pic on the local money market scene. Not too mention ppl the likes of N.Kishori, Lili Nah & Sam Sin etc if you guys know who they are, have boldly published their ads/ packages on the local national papers. Have Interviewed some of the participants of their programmes and seems unlikely able to work on a real world scenario(though hypothetically will only work with the given specific triggering events), as we all know and expected numerous ppl paid and got burnt and lost their principles, mainly frm these unscrupulous marketing wizards. With that number of casualities rising and complaints to the BNM, so gave BNM no choice but just to "sapu" everything irregardless of the legitimacy stand point of the activity,just to ease their convenience.

Now for one thing we know is that BNM is out to hit on these HYIP schemes (be it for political or monetary benefits) that was introduced by our good fellow neighbors - SG. What they practically did was putting the whole of the local FX activities on the scene and the result is that all of it got a run for their buck as well. I believe every one knows this is not something new, I've heard this 2 yrs back and same issue, no clear cut laws that will be able to prosecute an individual trader (without undertaking any sort of deposit from a secondary party). Now, i'm expecting some sort of bombardment - say not to kid myself, i truly agree with that. This is not something not to be taken lightly, especially when it comes to money, more over legality. I've scrutinized from left to right not only ECA/ ECM but also frm the local cyber laws point of view, unfortunately there werent any clear cut statement to prosecute any individual trader at the court of law (given that masterramdas quoted as the currency pair are just a mere FX Premium Instrument) for engaging in fx trades over the net (this is where cyber law comes in). My understanding is that all these operations took place out of the BNM jurisdiction or perhaps blatantly would be out of the MY law and regulation, unless otherwise specifically stated in the MY cyber law forbids/ prohibit to engage i.e access, trade or puchase/ sell any of the said fx premium instrument or any of the said party or provider. I mean, the MY authorities cant prosecute/ apprehend a king pin (residing in MY) for operating his hanky panky business in lets say colombia, all the authorities can exercise is just to extradite him back to colombia for trial. One more thing i would like want to stress is that the BNM did was issuing a secular statement, BNM is not the law, BNM is just a governing body for the locally registered financial institution. What am i saying is that what BNM issued was just a statement on 05 JAN 2010, its not the law, so what i saw was more of a warning rather a prosecution.

I would like to thank Jey for initiating the effort for sending the email to BNM for clarification, but as i would assume is that the reply was from some sort of generic help desk service support and has too much of the same question being bombarded for the past few weeks if not months so got tired and replied with just a simple "NO" (so this part is really kidding), besides would most of u guys just take a simple NO for an answer. I would totally agree with Jey of proposing to charter a lawyer to clarify this internally if possible. I would also totally agree with the idea of forming a an association for the the local traders, though not for the purpose of lobbying or any political reason (lets face it, if there arent any benifits/ interest for the politicians, why would they speak out), but rather a think tank, to work around solutions to protect the interest of the local traders.

My purpose for this post is that, just charter a lawyer (pool money) to study the case and review what are the implications and set backs and review whether are there any work around solutions - means of law or technology. Please give your 2 cents if any of you are willing. Btw i would like imranyusof for the insightful points - http://www.forexfactory.com/showpost...ostcount=21947 and also masterramdas for highlighting the fx premium instrument point, all my assumptions and understanding were mainly from your statements

Sincerely yours,
1Billion

I see no reason to keep digging on this issue and it is actually not an issue if you trade for yourself only.

Just stay away from all those ads because 99% of them is a scam. They either sell you a basic learning materials for a few thousands or ask you to put your hard earned money into their so called 90% winning probability system.

1. I agree with Master ForexQuant. This issue would never have come to light if only everyone traded by and for themselves only, i.e. not for other people.

2. This issue also only came up when people think they can "buy" a trading methodology, "switch it on" and then hope the "black box" will generate winning trades all the time; and then when the box blows up in their faces, they look for someone to blame and cry to the government instead of pointing fingers squarely at themselves.

3. If we all took personal responsibility for our own trading, we would all be trading quietly and no one would be the wiser. And the market will naturally weed out the financially "unready", just like some kind of Darwinian natural selection.

4. Master 1billion will have his own reasons for making his proposals (I will assume he is a "he"), and I respect his opinions, even though I disagree with most of them.

5. I disagree with chartering a lawyer. Lawyers that are savvy with financial market issues only work for financial institutions (from my observation as an interbank market participant) and normal lawyers will just get roasted. (by the way, even roasted lawyers still get paid free money for doing crap work, right?)

6. In any case, having been a trader for a bank since early 90's, having gone through the worse financial crises, and being familiar with the legal "nuances" of exchange control issues for most Emerging Market countries, to me the local Laws are clear and I just happen to know how to apply them in the proper context.

7. If it's not clear to the Man on the Street, I don't have an answer to that. I suppose it is because the statutes are meant to be convoluted in the belief (mistaken or not) that it should cover all ground.

8. The Man on the Street should not expect BNM to clarify the letter of the Law because, as I have mentioned on previous occasions, IT IS NOT BNM'S MANDATE TO ENCOURAGE SPECULATIVE BEHAVIOR! So please, please, please... REFRAIN from asking the BNM "helpdesk" to clarify this issue or that issue, because they may just take the easy way out, including closing loopholes.

9. Remember: FX trading is not our God-given right. God did not create currency. We trade at the pleasure of whatever local authorities that govern the tax domicile we are in, and if we push our luck, they may just close all the loopholes altogether. Just trade quietly and make money. (And don't forget to pay your taxes. If any. haha). And if you can't make money in FX, one can always buy unit trusts. No shame in that.

10. An association "to protect the interest of local traders"? Also not a good idea, bro. One question to ask: has there ever been an association to protect the interests of equity market "investors"? (those guys you see on the local business news, looking at KLSE price boards wondering how come their counters are not going up)

11. The answer to the above question: probably not (although I could be wrong). The Law does not protect stock market punters from making stupid bets. If the KLSE gamblers aren't protected, some would ask, "why should FX traders get special treatment?"

12. I am all in favor of informal groupings like the ones on Forex Factory, Forex Forums Asia, Forex-TSD etc etc, where we only stick to discussing trading methods.

13. But an association? It doesn't exist for equity punters (if I'm not mistaken), and I don't think it would serve Retail FX traders in any useful way either. There is also nothing that an association can do that an online forum (like Forex Factory) is already doing more efficiently.


My two cents.

Regards to all
Imran

Hi,

Yes i totally agree with imranyusof approach, let sleeping dogs lie, the more attention you attract, the more attention u get,the least i'm in favor of,attention cuts both ways though, but least not for the local money market scene, hahhahaha, but for me i'm sure i wouldn't like the lime light shining this way. Perhaps my elaboration of the association wasnt a appropriate word to use, yes master imran had put it eloquently, informal gathering. What i was referring was a think tank to serve the best interest for the local traders (as master imran had said, exchange of trading methodology, work around solutions etc) because at least there would be some reference point to start of with, maximising profits. As to lawyer/ legal issue, i brought it up as Jey made a good point on clearing the heads of most ppl, but as master imran pointed out, yes financial savvy lawyers work with the FI guys, will be futile to consult any 2nd rated lawyer other than that

1billion.

Master Imranyusof

if i understand correctly if we change our MYR with a local bank and send to our broker in USD we are legal.

How about when we transfer back into our account in MY ??
Will the bank or BNM query ?

Oh another newbie question, i believe trading income is not taxable but are we subjected to IRB query ??

thanks for your time

newbie trader here...

1. When a Malaysian Resident converts MYR to any other currency, he always has to declare the purpose one way or another.

2. If transfer back, I don't think so. Even if I'm wrong, I don't see what's the problem. Just declare only la.

3. As for taxes, if you think not taxable, that's your opinion, I guess. I am not a tax expert so I am not qualified to comment. I will also not comment on my own personal experiences as I feel different people have different tax circumstances so they should just do their own research.

4. My only advice: ALWAYS expect an IRB audit at some point in your life. And God help you if you don't have the answers on hand. I have my own answers for my own situation. Do you?

5. My opinion: Paying taxes is not my BIGGEST problem. My biggest problem is the possibility that lazy "investors" out there will spoil it for people like me by crying to the government when their "black boxes" cut their balls off.

6. Paying taxes should not be YOUR biggest problem either. Usually if you have to pay taxes, it's because you're MAKING money. And making money is always better than losing.

HUH? never heard of this before? I stayed in sarawak malaysia for 5 years and had been trading forex full time since then, and never been into trouble with malaysian government until i'm back here in australia.

"Different strokes for different folks", as some would say...

Good on ya, mate!

I dunno what to say but thanks my friend. I remember, when i was still in sarawak, i had been trading only the four majors and since my wife is a bumiputra they even exempt me from tax my wife used to work for the residence office ( i even have a free medicines and hospitalizations)

Cheers mate!

Income return from forex shouldn't be taxable due to:
1. it it a capital gain. Just like u dun get tax on increase in share prices u've invested.

2. the income is gained from your account outside malaysia. If it's gain from inside malaysia, most liikely its illegal, coz BNM says cannot trade in Malaysia...hahaha..

How can forex be illegal?. Forex transaction are worth $3 Trillion per day.

That is why Malaysia Boleh!!!! 'Boleh' is a Malay language which means 'can'. Here can do anything that you think cannot else where.

How can forex be illegal in my country??? Because Malaysia can!!!

Ya, Malaysia Boleh.
Mesti Boleh. ( Sure Can. )

Thanks!

As long as you have your way of answering an audit, all power to you!

Nothing wrong with being audited, of course. Keeps everybody honest....

To clarify, though...

1. Just because people think that it's capital gain only so no need to declare, that's the wrong way to think about it.

2. Residents still need to declare to PROVE that they don't have to pay taxes. If you have nothing to hide, you should have no problem declaring.

3. By the way, I don't LIKE to pay income tax either, but all that shit about not being able to escape "death and taxes"... it's all true.

I'm certainly no expert on Malaysian central bank activities But here's a thought - maybe they're mad at forex speculation because some years ago George Soros made a bundle shorting the Malay Ringgit. Is there anyone here from Malaysia? You would know more about the history of this and could perhaps elaborate - I know the former Malay PM Mahathir had no love for Soros...

1. The Soros story is all water under the bridge by now.

2. The ringgit is semi-controlled now SGD-style, so it's no longer an issue, as long as Malaysian Residents don't speculate on the ringgit, and focus on G7 pairs only.

3. I was an interbank USDMYR trader prior to the Economic Troubles of '97, and even *I* still think currency controls (for the ringgit) was a damned good idea despite the fact that my bread-and-butter currency pair was taken away from me.

4. Let sleeping dogs lie, and let's keep our eye on the Prize! (which is more money for ourselves and our families.)

I agree with you my friend don't get me wrong i always declare all my earning with forex or other investments... but here in australia, they don't charged tax with forex