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Forex trading has been popular among traders who wish to profit from short trades and those who want to make long-term investments. Even the geographical barriers do not cause any downfall in its popularity. And so is the case in the southeastern Asian country, Malaysia. The country’s residents are well aware of forex trading and are actively trading forex in the capital market.
The financial regulatory body of Malaysia is the Securities Commission of Malaysia (SCM). It was instituted in 1993 and has issued many guidelines that have made trading in Malaysia more convenient and safe for traders and brokers. For example, the SCM advises its brokers to acquire the CMSL (Capital Markets Services License) to give them more advantages in the market. It has also published some guidelines on trading CFDs (Contracts for Difference), which came into effect in 2018.
The Malaysian economy had rapid annual economic growth in the last year at a pace of 8.7% year-on-year (y/y). Government policies, global commodity prices, trade relationships, and domestic demand have influenced Malaysia’s economic situation. The country is known for its diversified economy, with key sectors including manufacturing, services, and agriculture. However, its economy heavily relies on electronics, petroleum, and palm oil exports.
What is the Best Forex Broker in Malaysia?
The best forex brokers in Malaysia are HF markets and Instaforex because of excellent 100% bonuses, high leverage, e-payments methods such as Skrill, Neteller, and great multilanguage support.
In my experience, Malasyan traders like fast deposit and withdrawal options and forex competitions. That’s why a lot of traders like the HFM Markets Copy platform.
HF markets broker offers the following advantages:
- Regulation and Security: Several reputable authorities regulate HF Markets, including Mauritius’s Financial Services Commission (FSC) and the Cyprus Securities and Exchange Commission (CySEC). This ensures a certain level of financial security and transparency for Malaysian traders.
- Wide Range of Tradable Instruments: HF Markets provides access to various financial instruments, including forex currency pairs, commodities, indices, stocks, and cryptocurrencies. This allows Malaysian traders to diversify their portfolios and exploit multiple market opportunities.
- Multiple Trading Platforms: HF Markets offers a selection of trading platforms, including the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms. These platforms are well-known for their user-friendly interfaces, advanced charting capabilities, and a wide range of trading tools and indicators.
- Competitive Trading Conditions: HF Markets provides competitive trading conditions, including low spreads, fast execution speeds, and minimal slippage. This can benefit Malaysian traders, as it allows for more cost-effective trading and reduces the impact of market volatility.
- Various Account Types: HF Markets offers different types of trading accounts to cater to the needs of multiple traders. These include Micro, Premium, Zero Spread, and Auto accounts. Each account type has unique features and requirements, allowing Malaysian traders to choose the one that best suits their trading preferences and strategies.
- Educational Resources: HF Markets provides educational resources, including webinars, tutorials, and market analysis, to help traders enhance their knowledge and skills. These resources can be handy for Malaysian traders looking to improve their trading abilities and stay updated with market trends.
- Local Support: HF Markets has a local presence in Malaysia and provides dedicated customer support to Malaysian traders. This ensures that traders can receive assistance in their local language and time zone, making addressing concerns or inquiries easier.
Malaysian traders must conduct their research and due diligence before selecting a forex broker. While HF Markets offers these advantages, it’s recommended to consider individual trading preferences, risk tolerance, and other factors before making a decision.
Forex trading is legal in Malaysia and requires brokers to be registered under a regulated institution. Therefore, being a registered broker and having a CMSL is another benefit for trading in Malaysia. Considering all the facts, the following is the list of all the forex brokers regulated internationally and can help traders in forex trading in Malaysia.
Regulated forex broker list that operates in Malaysia
| Forex broker Review | Visit | Min. lot size | Max. leverage | Min. deposit |
|---|---|---|---|---|
HFM | VISIT HFM | 0.01 | 1:1000 | $1 |
Avatrade | VISIT AVATRADE | 0.01 | 1:400 | $1 |
Instaforex | VISIT INSTAFOREX | 0.0001 | 1:1000 | $10 |
FxPro | VISIT FXPRO | 0.01 | 1:500 | $100 |
IC Markets | VISIT IC MARKETS | 0.01 | 1:500 | $200 |
XM.com | VISIT XM | 0.01 | 1:1000 | $5 |
| VISIT EXNESS | 0.01 | 1:2000 | $10 | |
| Octafx review | VISIT OCTAFX | 0.01 | 1:400 | $50 |
Registered forex brokers in Malaysia can be compared on many grounds, such as the regulatory body, customer support, and the resources they can provide a trader with. Based on these factors, a trader can choose a broker to suit their portfolio.
How to do forex trading in Malaysia?
To start forex trading in Malaysia, you must find a regulated broker, install a free trading app and learn basic trading rules using a virtual demo account. In addition, it is crucial to start reading books on technical and fundamental analysis.
Like a forex exchange in any other country, foreign exchange in Malaysia is also regulated by specific laws and rules. These laws automatically apply to those who trade forex in Malaysia. Therefore, every trader should ask their broker about these laws and comply with these regulations.
Three of the primary laws that look after forex trading in Malaysia are:
- The Securities Commission Act, 1993: Originally introduced in 1993, this Act was amended in 2017. Under this Act, the SCM obtained the power to give licenses to the institutions and businesses dealing in securities and work as a regulatory body for trading in the country.
- The Exchange Control Act, 1953: One of the oldest acts introduced in Malaysia is the Exchange Control Act. It was proposed in 1953 to regulate forex trading by both residents and non-residents of Malaysia. The Act states that non-residents can invest in the country’s assets. Moreover, there are no limitations to transferring the profits or any other proceeds to another country.
- The Money Exchange Act, 1998: As the name suggests, this Act is associated with the laws and regulations related to any business involved in currency exchange. The Money Exchange Act states that any company, institution, or individual who, under the ECA (Exchange Control Act, 1953), is licensed to exchange forex must also be licensed under the MCA (Money Exchange Act, 1998.
It is not superficial to say that a regulated broker can be trusted more easily than unregulated brokers. This is because the Securities Commission of Malaysia is the body that governs these brokers, and an easy way to make sure if the SCM regulates the broker or not is to check for the registered number that can be easily checked from the disclosure text that can be seen at the end of the homepage of Malaysia brokers.
It can also be confirmed from the official website of the SCM, where one can verify the status of regulated forex brokers in Malaysia.
Apart from the SCM, the Central Bank of Malaysia, Bank Negara Malaysia, regulates the country’s forex dealers and other monetary services. It has also introduced some guidelines that regulate the trade and ownership of cryptocurrency in the country and states that companies dealing with digital currency must comply with these guidelines.
Is forex trading legal in Malaysia?
Yes, forex trading is legal in Malaysia. The main regulatory body overseeing forex trading in Malaysia is the Securities Commission of Malaysia (SC), responsible for ensuring the stability and integrity of the Malaysian financial markets.
Forex trading is regulated under Malaysia’s Capital Markets and Services Act 2007 (CMSA). The CMSA empowers the SC to regulate and supervise all matters related to securities and derivatives, including forex trading activities. The SC’s objective is to promote fair and transparent trading practices while protecting the interests of investors.
To legally offer forex trading services to Malaysian residents, a broker must be licensed and registered with the SC. The licensing process involves meeting specific requirements and adhering to stringent regulatory standards, such as maintaining adequate financial resources, implementing robust risk management systems, and conducting regular audits.
The legality of forex trading in Malaysia is based on the intention to safeguard investors’ interests and ensure the financial system’s integrity. By regulating the industry, the SC aims to protect Malaysian traders from fraudulent activities and unscrupulous brokers while promoting a fair and transparent trading environment.
However, Malaysian traders must choose licensed and regulated brokers like HF Markets (HotForex) to ensure compliance with local laws and regulations. This provides an added layer of protection and ensures that traders can seek recourse in case of any issues or disputes.
Conclusion
The SCM and the Central Bank of Malaysia regulate the country’s financial market and brokers. The Bank of Negara Malaysia made it compulsory that forex can only be traded through regulated banks. With the growing popularity of Forex trading in Malaysia, more and more brokers are advised to acquire the CMSL to provide traders with a trustworthy platform. Looking at the regulations controlling the market and the growing demand for forex among the residents of Malaysia, the Malaysian securities market has a flourishing future.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
