What Bank Negara Malaysia says
Bank Negara Malaysia (BNM) describes an illegal foreign exchange trading scheme as buying or selling foreign currency with a party that is not a licensed onshore bank and has not been approved by BNM under the Financial Services Act 2013 or the Islamic Financial Services Act 2013.
BNM names licensed onshore banks as the parties to deal with: commercial banks, Islamic banks, investment banks and international Islamic banks.
Forex and CFD products that work like capital market products also fall under the Securities Commission Malaysia (SC). Many online forex and CFD platforms appear on the SC Investor Alert List as unauthorised.
Warning signs BNM lists
High returns promised, or paid out early to build trust.
Encouragement to invest more after early “profits”.
Demands to pay a “margin call” before you can recover losses or withdraw.
How to check before you trade
1. Ask for the provider’s legal name and licence in writing.
2. Check BNM’s financial fraud alerts at bnm.gov.my.
3. Search the SC Investment Checker and the SC Investor Alert List.
4. If the provider says it is licensed in Labuan, check Labuan FSA’s records too. A Labuan licence is not a licence from BNM or the SC.
Common questions
Is a Labuan-licensed broker an onshore bank? No. Labuan brokers are licensed by Labuan FSA, not by BNM as onshore banks.
Where do I report an illegal forex scheme? BNM on 1-300-88-5465, or the SC on 03-6204 8999.
This article explains what regulators publish. It is not legal advice.