1. Who can I buy and sell foreign currency with in Malaysia?
You can buy or sell foreign currency only with authorised dealers and those entities permitted by Bank Negara Malaysia as stipulated under section 4 of the Exchange Control Act 1953.

Authorised dealers are licensed commercial banks and licensed Islamic banks. Please refer to website at http://www.bnm.gov.my under "Foreign Exchange Administration" for further details.

2.Is trading of foreign currency through the internet allowed?
No. Residents are not allowed to trade currency through internet.

Residents are only allowed to buy or sell currencies in Malaysia with authorised dealers and those entities permitted by Bank Negara. Please refer to website at http://www.bnm.gov.my under "Foreign Exchange Administration" for further details.

3. I work for an advertising company. We received a number of orders to design, print and distribute posters on behalf of a client, a company promoting training on foreign currency trading. Is such activity legal in Malaysia ?
Under section 4A of the Exchange Control Act 1953 (the ECA), it is an offence for any person, other than an authorised dealer to:

- issue or publish or facilitate the issuance or publication by any person of an advertisement containing an invitation or an offer to buy or sell foreign currency or information which is intended or might reasonably be presumed to be intended to lead directly or indirectly to the buying or selling of foreign currency; or

- aid or abet another person to do the above.

"Advertisement" means the disseminating or conveying of information, invitation or solicitation by any means or in any form, including by means of:

- print media
- posters, notices or signboards
- circulars, brochures, pamphlets or books
- letters addressed to individuals or bodies
- electronic media

You are advised to take the appropriate measures and action to ensure all advertisements issued through your company comply with the ECA

4. My cousin has enticed me to invest in one of the schemes offered by his company, purportedly involving the buying and selling of foreign currency for investment purposes. Can a company offer such a scheme?
No. As stipulated under the Sections 4 and 4A of the Exchange Control Act 1953, it is an offence for any person other than authorised dealers to be involved in:

- buying or selling of foreign currency with any person
- conducting of any form of training, seminar, workshops which involve, or are preparatory to, buying or selling foreign currency
- issuing, publishing or facilitating the issuance or publication of an advertisement intended to lead to the buying, borrowing, selling or lending of any foreign currency


5. I have heard about a scheme which offers foreign currency trading. Is this allowed? How does such a scheme operate?
Such foreign currency trading schemes are illegal and prohibited under section 4 of the Exchange Control Act 1953

The modus operandi of such illegal schemes/scams are typically as follows:

- Offer free training, seminars or workshops to lure investors, prior to inviting investors to set-up an online foreign currency trading account with a principal company (purported to have valid licence to trade foreign currency overseas)

- Provide convenient access to the principal company's website and trading facilities to facilitate online foreign currency trading by investors

- Recruit fresh graduates as marketing executives and encouraging them to get their family and friends to trade foreign currency

- Require investors to deposit an amount of money into a bank account to begin trading foreign currency, and subsequently, requesting for a top up on their initial investment ("margin call") to avoid losing their capital


6. What are the risks involved if one participates in such an illegal scheme?

Participation in such an illegal scheme is an offence under the Exchange Control Act 1953 and on conviction , is liable to a fine not exceeding RM1 million or to imprisonment for a term not exceeding five years or to both

In addition, in most cases, the victims of these schemes would have lost all their money.

It would be a lengthy and costly process for a participant to engage lawyers to bring a civil suit against the perpetrators.

Those who had acted as middle men or agents would run the risk of themselves or their family members being threatened or face physical harm when the scheme fails.


7. What should I do if I am a victim of these schemes?

You are advised to lodge a report at the nearest police station as well as to report to Bank Negara Malaysia as follows:

Bank Negara Malaysia
BNMTELELINK (Customer Service Call Centre)
Tel: 1-300-88-5465
Fax: 03-21741515
Email: bnmtelelink@bnm.gov.my

BNMLINK (Customer Service Walk-In-Centre)
Block D, Bank Negara Malaysia ,
Jalan Dato' Onn, 50480, Kuala Lumpur
(Business hours: Monday-Friday, 9.00 am - 5.00 pm)

8. Where can I obtain further information on illegal foreign currency trading?

Information on the illegal foreign currency trading is available in the banking information website at http://www.bankinginfo.com

9. What is the penalty imposed by Bank Negara Malaysia on offenders of illegal foreign currency trading?

Pursuant to the Exchange Control Act 1953, any person involved in illegal foreign currency trading shall, on conviction, be liable to a fine not exceeding RM1 million or to imprisonment for a term not exceeding five years or to both.

10. Any guide to the general public on how to detect an illegal foreign currency trading operator?
Members of the public are advised to be careful and not fall prey to operators of these illegal schemes.

The guides on how to detect illegal operators and warning signs for investors can be obtained from the website, http://www.bankinginfo.com under "Help & Advice/Helpful Guides/Financial Scams"

In general, the illegal operators normally:

- Place attractive advertisements to lure others to listen to their convincing but bogus marketing plan

- Have their headquarters overseas

- Have impressive offices and IT facilities

- Conduct training to prospective employees on the principles of foreign exchange trading and hands-on exercises on foreign currency dealing using dummy or fake transactions under an environment controlled by the operator. Normally, all such dummy transactions will result in profits

- Hire employees based on commission and they are not given a proper employment letter or contract stipulating the employment terms and conditions.

Before employees can start dealing, they are required to look for potential investors and collect deposits from them. Otherwise, they risk losing their jobs.

They will try to impress potential investors:-

- With the marketing strategy of the company which promises quick and high returns

- By portraying a professional and reputable image with smart-looking employees, a high-tech office layout and advanced IT facilities. In some cases, investors are even allowed to operate their account via internet

- With tools of the trade e.g. a news screen showing movements in exchange rates to give the impression that a professional and legitimate business is being conducted. These facilities are merely cosmetic and do not reflect an actual foreign currency trading office.

Investors can either trade using their trading accounts with the company or through dealers appointed by the company. Investors are also required to sign a business contract which is normally entered between the investors and the company. In most instances, the operators will inform the investors that they will have to send such contracts to its company's headquarters based overseas for signing. However, such contracts are usually left unsigned. As such, in the event the investors are not happy with the transaction, no action can be taken against the company as there is no binding contract between them.

11. Where can I find the list of institutions permitted to conduct foreign currency business and remittances services in Malaysia?
The list of institutions which are permitted to conduct foreign currency business and remittance services in Malaysia is available from Bank Negara Malaysia's website at http://www.bnm.gov.my under "Foreign Exchange Administration".