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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

Its hard to track cos you fund your account let say via paypal, then you trade via a vps let say or even on a MT4, you loose fine, if you win you transfer the money back to paypal, how on earth will they even know you trade forex?
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...
1. Again, some people are missing the point.

2. It doesn't matter if "THEY" know because you are not doing anything wrong.

3. The post by Greenmoney21 was made in January 2010. A lot of posts have been made since then to discuss the issue.

4. Please take the time to read the thread in chronological order before posting on your own, because you won't know if the issue you bring up has already been resolved otherwise.

5. Please use this same methodology whenever you drop by into an existing thread or conversation.


Quoting juzgood1978
Its hard to track cos you fund your account let say via paypal, then you trade via a vps let say or even on a MT4, you loose fine, if you win you transfer the money back to paypal, how on earth will they even know you trade forex?
I'm not trying to convince anyone. I'm not in the "convincing" business.
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Quoting imranyusof
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?
Hi Imran, my search seems to indicate that the limit would be RM 10k before your "inviting" the inevitable questions from BNM. Is this correct?

However I spoke with 2 other officers from 2 different banks who said 2 different things to me;

1. A Manager from Stan Chart KL, he says the limit for TT to a foreign account would be RM 200k. Below that no queries. He even gave me a form to fill up in case I wanted to remit more than RM 200k.

2. A well known officer to me from Maybank - he says BNM is monitoring ALL money movement in and out of M'sia. Doesn't matter what amount and doesn't matter inflow or outflow.

So if we went by the Stanchart guy, rm10k doesnt invite anything until its RM 200k. If we went by what the Maybank guy says, even if you remit RM1 by TT will be inviting those dreaded questions.

No body seems to have a standard figure as to what constitutes minimum. Will under RM10k be small enough NOT to invite those grueling questions, in your opinion or experience?
I have seen the enemy, and it is me.
1. BNM IS monitoring ALL money movement, inwards or outwards. It's just a matter of whether the movements are reported by the banks in aggregate (for deals below the threshold reporting amount), or on a per transaction basis (for deals ABOVE the reporting amount).

2. I'm not sure what is the ruling now, but (for exporters/importers at least), all conversions above MYR50k per deal have to be declared as to their purpose (i.e. is it for goods, for services, for investment etc etc).

3. Anything less than that gets aggregated along with other "ciput" amounts, which doesn't really matter because your transaction details are still in the "system" thereby increasing your paranoia unnecessarily. *rolls eyes at the paranoid*

4. The "questions" you mentioned are not "grueling". You just have to fill in a declaration form. That is all. Nothing sinister in that, and one should not continue to insist that it is, when it isn't.


Quoting Jey
Hi Imran, my search seems to indicate that the limit would be RM 10k before your "inviting" the inevitable questions from BNM. Is this correct?

However I spoke with 2 other officers from 2 different banks who said 2 different things to me;

1. A Manager from Stan Chart KL, he says the limit for TT to a foreign account would be RM 200k. Below that no queries. He even gave me a form to fill up in case I wanted to remit more than RM 200k.

2. A well known officer to me from Maybank - he says BNM is monitoring ALL money movement in and out of M'sia....
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting ramdas
when you buy/sell EURUSD you are buying FX Premium Instrument .

EURUSD or USDJPY or GBPUSD is not a currency it is instrument.

EUR or GBP or JPY is currency since it has physical existance.
But EURUSD is not a currency since it has no physical existance .... it is Exhange rate.
Forex broker offers Exchange rate instrument not Currency.

Ah, now that is golden. I wonder what the CFTC could argue in that case?

You are exactly right BTW. Charm them with brillance and baffle em with BS. Nothing less than they are doing to us.
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Quoting imranyusof
1. BNM IS monitoring ALL money movement, inwards or outwards. It's just a matter of whether the movements are reported by the banks in aggregate (for deals below the threshold reporting amount), or on a per transaction basis (for deals ABOVE the reporting amount).

2. I'm not sure what is the ruling now, but (for exporters/importers at least), all conversions above MYR50k per deal have to be declared as to their purpose (i.e. is it for goods, for services,...

Ahhhh, now thats what I call crystal clear. And that makes perfect sense. < 50k reported as aggregate, > 50k gets reported for what it is. As you say, there is nothing to fuss about really Statistically I can be well hidden inside the aggregate as a small worm.

Almost could have kicked myself for getting concerned over this unnecessarily instead of being concerned where the price is heading on the charts. Nucking Futs!!!
I have seen the enemy, and it is me.
That sucks, I'm sorry to hear.

What I would worry about is brökers seizing to accept Malaysian customers.

If they still accept you, then I would continue my forex activity but would move offshore, in other words see if I can open an offshore bank account in my name through which to handle transactions with my forex bröker(s) (which is off shore too of course), and in which to keep all my forex assets. Trading forex may be illegal under Malaysian jurisdiction but not other jurisdictions. As far as the Malaysian central bank and Malaysian banking institutions are concerned, you are not dealing with any forex bröker. Just try to avoid transfers between your offshore account and local banks, use debit cards to withdraw, etc. In other words avoid scenarios that may lead to your local bank freezing your cash and asking for proof of its origin, and you should be fine.

Alternatively, I would consider trading futures if the above is not possible. FX futures and the E-mini markets look appealing, so you don't have to quit trading altogether.
When you move funds into the new brokerage do it in smaller than $10,000.00 USD pieces, if it is larger, Belgium is supposed to report it to the originators government through the SWIFT code. This is I KNOW for US and Canada but I am sure it is the same across the boards, this is so the government can check your activities. In case of terrorism or illegal currency trading, LOL!

Going offshore is simple and free, I will drop the offshore forex brokerage link again.

I still can't believe they outlawed it, they should have stopped Forex US style, where they just make it impossible to profit.


Quoting Marv
That sucks, I'm sorry to hear.

What I would worry about is brökers seizing to accept Malaysian customers.

If they still accept you, then I would continue my forex activity but would move offshore, in other words see if I can open an offshore bank account in my name through which to handle transactions with my forex bröker(s) (which is off shore too of course), and in which to keep all my forex assets. Trading forex may be illegal under Malaysian jurisdiction but not other jurisdictions. As far as the Malaysian central bank and Malaysian banking...
Yes, thanks for the link (that is filled with your affiliate links ). That is exactly what I already described in my post.

Everybody is going offshore these days, with governments being such anti-freedom jerks.
Yes, but being an affiliate for over a hundred brokerages means I might know what I'm talking about

I have seen the bucket shops fold and know what to look for, but I have also seen how the big boys can have "a low liquid period" and go stop hunting while other brokerages don't have that same erratic movement. I am not listing any old brokers, these are the best I have found for my personal trading. The one that does not accept US citizens is the best I have found period, unless you go above $50,000 minimum deposit, then there is much better

My Dad went offshore 20 years ago, and I have been offshore for more than 10, smartest thing I ever did,



Quoting Marv
Yes, thanks for the link (that is filled with your affiliate links ). That is exactly what I already described in my post.

Everybody is going offshore these days, with governments being such anti-freedom jerks.
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Your a real blessing to this thread Hissst!
You have helped some of us with your info sharing so freely.
I have seen the enemy, and it is me.
I hoped I could help with my experience.

I would like to do a survey if I can.

With the Malaysian ruling how has this changed your trading:

1. Stopped trading forex all together.
2. Got new offshore brokerage and continued as normal.
3. Something else. (Please describe)

Thanks!


Quoting Jey
Your a real blessing to this thread Hissst!
You have helped some of us with your info sharing so freely.

  1. I would be interested to know the results of this survey as well. Should be interesting.
  2. It would give me a great sense of relief if the number of Malaysians who have stopped trading retail FX altogether prove to be large.
  3. I personally would want these people to be out of the market, as many as possible. Less rookies with lousy credit ratings in the market, less crybabies crying to the central bank when their margins go down the toilet through their own incompetence.
  4. I would be equally interested to be shown anything in print from BNM that states categorically that "retail FX trading" (which does not involve ringgit directly) is "outlawed", as you mentioned in an earlier post.
  5. By the way, all RETAIL FX brokers (not WHOLESALE or INTERBANK), with regards to Malaysian traders, are already offshore. So "offshore broker" is just stating the obvious.
  6. The reason why brokers are offshore is because they have not been issued licenses to operate DOMESTICALLY. Just because they have not been issued licenses does not mean they have been outlawed. (The word "outlawed" or "banned" was never used by BNM, AFAIK. If anyone can show me otherwise, I readily stand corrected.)
  7. They just do not exist in the Malaysian Financial Markets universe. Yet.
  8. You can't outlaw something that does not exist. For example, flying pigs do not exist, and you can't ban them either. Although, if they did exist, whether the Malaysian government will ban them or not, is a separate issue which has not arisen. Yet.
  9. Why? Because flying pigs do not exist. Yet.



Quoting Hissst
I hoped I could help with my experience.

I would like to do a survey if I can.

With the Malaysian ruling how has this changed your trading:

1. Stopped trading forex all together.
2. Got new offshore brokerage and continued as normal.
3. Something else. (Please describe)

Thanks!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • Post #234
  • Quote
  • Edited Oct 25, 2010 12:02am Oct 24, 2010 9:51pm | Edited Oct 25, 2010 12:02am
  •  Jey
  • | Joined Jun 2009 | Status: Market Slave-Overworked/Underpipped | 283 Posts
Quoting Hissst
I hoped I could help with my experience.

I would like to do a survey if I can.

With the Malaysian ruling how has this changed your trading:

1. Stopped trading forex all together.
2. Got new offshore brokerage and continued as normal.
3. Something else. (Please describe)

Thanks!
To answer your surveys, here is how I think about this.

#1. I dont think anyone has stopped doing it coz the term "forex trading" as understood by the central bank (BNM) in Malaysia is a misnomer. One good reason on why I think its a misnomer is coz there is no physical exchange of currencies taking place at any time or at any stage. Nothing at all! All we're doing is changing our RM into USD or any other currency within our local banks (i.e, credit card, TT, wires, etc) when we're funding the margin account with the broker and which falls within the guidelines of BNM. Then what we're doing next is that we are taking a position and betting against the direction of a certain currency, or financial instrument, or whatever else you want to call it WITH OUR BROKER, not against the market. Its always, always against the broker.

But the important matter to note is that,

a. No physical currencies has exchanged hands (or traded) with anyone.
b. We exchanged the RM into USD with our local banks.
c. We are betting against our broker in predicting the direction of the movement of a currency pair or pairs.
d. We get paid if our prediction was right and the returns are based on our margin deposited with the broker.
e. All transactions with our broker after converting into USD is USD to USD.
f. If we wire back our "winnings" to our local bank, again, the conversion is done via local banks.

So this being the case, there is no "forex trading" taking place and that term is a misnomer. Unless someone can point out where exactly were there any currencies being traded as in steps above.

#2. This is an excellent idea but its not really necessary if we went by the above explanation. Nevertheless, for those who want to keep their peace or too scared that they're breaking any rules then this should be a good option to move offshore and go about it as normal as before.

#3. I cant see anything in the "others" category for this yet.

Hope that helps.
I have seen the enemy, and it is me.
Yes. You as a retail trader are not really "trading currencies" but speculating on the relative value of currencies.
Hi Malaysian guys here, I would also like to know if anyone here can explain about the taxation of income obtain from trading forex. If trading full time, how do you guys declare the income tax? If not, how do you guy buy anything with the money? Please share.
Take my view with a pinch of salt!
1. Am not sure if you will actually get a definitive reply on your question. When it comes to paying income tax, game theory suggests no one would readily confirm or deny if they are liable to pay. Myself included.

2. How do they buy stuff with the money? If you're implying how they can get away with it, I don't see how they can or why they should even try, since no crime has been committed, AFAIK.

3. (But to properly answer that question, one way is through the use of debit cards. Some people use cards issued in the US, some people have no problems using domestic debit cards.)

4. Otherwise my earlier reply in this forum applies (with special mention of a book).
http://www.forexfactory.com/showthre...ax#post3888553


Quoting anudora
Hi Malaysian guys here, I would also like to know if anyone here can explain about the taxation of income obtain from trading forex. If trading full time, how do you guys declare the income tax? If not, how do you guy buy anything with the money? Please share.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Strictly my opinion.

1. Malaysian Central bank (BNM) should start formulating ways to impose Tax on Forex income as taxable income. Its actually easy. All brokers have monthly report, so send the report together to income tax dept and any annual profit earned (profit - losses) of more than USD10,000 should be taxable. If I were not mistaken, thats the cut off income. THIS COULD HELP CURRENT MALAYSIAN GOVERNMENT DEBT OF MORE THAN USD 100 BILLION (53% OF ITS GDP, which is worrisome). Any responsible malaysian want to help. But the government must be responsible too.

2. IF the malaysian Ringgit need to be protected, DONT ALLOW MALAYSIAN RINGGIT TO BE TRADED IN THE OPEN, ESP FOREX MARKET. If the Malaysian govt want to do this, its quite possible. Penalise those who are involved (Probably Malaysian, because to date they cannot lay their hand on yours truly G Soros). Statement from brokers are readily available. Most traders only trade MAJOR Currencies anyway.

3. I am very positive, we can help the Malaysian Government. They are also helped by other tax payers like Gambling Casino at Genting Higland, Sportstoto number prediction, and handful other gambling joint.

4. My plea for Forex trading to be legal. Because FOREX traders ARE NOT gamblers (as I see it).

Thank you.
1. haha.. the absolute LAST thing I want my tax money to do is to help THIS government pay off its debt. To paraphrase a certain minister: I'm a Muslim FIRST, taxpayer, bread-winner and registered voter SECOND, many things in between, and Malaysian LAST. Patriotism is last century's story. Time to get to work. Strictly MY opinion. Am not trying to convince anybody. I'm not in the "convincing" business.

2. I pay zakat anyway.

3. Err... Ringgit is already NOT allowed to be traded in the open i.e. offshore. Apart from licensed moneychangers (who don't really "trade"), only Authorised Institution (AIs) traders can trade ringgit and even then only onshore. I should know. I'm one of them.

4. As far as legality is concerned, there's nothing in the statute books that says non-ringgit retail FX for private investors is ILlegal. If anyone can point to anything that says such a thing, I readily stand corrected. (But I doubt it.)

5. Interesting suggestions tho', dprof. Anyways, if you haven't already done so, I invite you to peruse this entire thread from the very beginning. I believe a lot of misconceptions would be cleared up.

Cheers!

Quoting dProf
Strictly my opinion.

1. Malaysian Central bank (BNM) should start formulating ways to impose Tax on Forex income as taxable income. Its actually easy. All brokers have monthly report, so send the report together to income tax dept and any annual profit earned (profit - losses) of more than USD10,000 should be taxable. If I were not mistaken, thats the cut off income. THIS COULD HELP CURRENT MALAYSIAN GOVERNMENT DEBT OF MORE THAN USD 100 BILLION (53% OF ITS GDP, which is worrisome). Any responsible malaysian want to help. But the government...
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting imranyusof
Patriotism is last century's story. Time to get to work. Strictly MY opinion. Am not trying to convince anybody. I'm not in the "convincing" business.
If everybody believed and acted upon that, something tells me the world would be a better place.
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