Hi Guys,

I've been using interactive broker for the last 3 months trading US Stocks. I funded the account using my US Bank (I used to work in the US - so got some savings la) I also linked my Maybank for withdrawal (also my transferwise borderless acct, just incase)- yet to do any withdrawals though

However, I found a post on lowyat saying Maybank (or Bank Negara) block transactions from IB due to their affiliation with forex? Hence cant fund or withdraw money to a local bank? Link below
https://forum.lowyat.net/topic/4498867/all

I'm planning to trade stocks full-time as I generate a decent income from it every month, and Ive been investing/trading for last 5 years when I was working in the US (not a newbie la )
Planning to register as self-employed for tax/banking purposes - already discuss with a tax lawyer friend - I have shared the conversation (tax for fulltime trader) in this forum for those interested in self-employment/fulltime trading
https://forum.lowyat.net/topic/5102221

One question I couldn't answer my lawyer friend is that - is IB legal in Malaysia? Will BNM block the funds to be transferred back to our local banks?
I don't find any article/documents suggesting IB is illegal in Malaysia - and seems to the first recommended platform if want to trade US stocks from Malaysia.

Hope to get some feedback from Sifus here

I have no idea as I've never used IBKR before.

But if BNM really blocks your withdrawal from IBKR to your MBB.

Maybe you could withdraw your money back to your US bank account. Then from there TT back your money to MBB?

if not recognised and approved by SC / any Malaysia authority = illegal, then it is illegal

Malaysia is not favourable of any international brokers.
Most of the international brokers don't set their business/office in Malaysia too because Malaysia is too conservative and living in own world.

Thou, a lot of us here use IBKR, but we fund in and fund out using our SG bank.

https://forum.lowyat.net/topic/4843925/+3180#entry100026943
https://forum.lowyat.net/topic/4744515/+1120#entry99989071
https://forum.lowyat.net/topic/1440794/+3240#entry100025402

This post has been edited by tadashi987: Feb 18 2021, 01:23 PM

Thanks for your feedback. I have a few more questions

my understanding of not recognized by SC means your funds in IB is not protected by SC/BNM in case anything bad happens (broker bankruptcy) (Can someone validate this)

if its illegal
1. why are we allowed to register IB in the first place (country and taxID Malaysia during registration) - if it's downright illegal, this wouldn't be possible right especially for an established and globally trusted broker - I guess I need to call IB and figure this out

2. In the same lowyat post - the post owner said he can't do the transfer using Maybank but can using CIMB. Another person who replied said he used Maybank FCA to transfer funds. this is confusing

3. So from your SG bank, you guys direct them back to your Malaysia bank for personal use?

4. The broker is not illegal but just not recognized in Malaysia by SC (I've read a similar post regarding Etoro) - so what would be the risk here? Can your bank account be frozen? or only transaction blocks?

I see people post, if the bank block from IBKR, just use Transferwise or Instarem (now it's possible to transfer MYR to USD directly using transferwise borderless acct - I have linked it but yet to do a transfer) - how is this method of transaction legal then? (as you also did with your SG bank), end of the day coming from the same source.

hope I don't sound rude, I'm just thinking out loud. many contradicting points

If it's illegal like what happen to TD and etoro, it will be blocked eventually.

Ignore the SC and BNM living in their own world.

Access to IB will also be blocked like what happen to TD. Use a trustable VPN to access IB if it's block.
As tadashi987 said,
Open a sg bank account and convert your money to SGD and direct deposit into IB SG bank account.

Do not use Malaysian banks to transfer money to sg. Just fintech. Lots of fintech offering money changer rates to send money to sg.

To bring back money to Malaysia use CIMB sg or TransferWise.

This post has been edited by Ramjade: Feb 18 2021, 02:40 PM

And Malaysian law state that if you don't have debt, you can invest unlimited of money overseas. If you have any debt, max you can transfer out of Malaysia is RM1m/year.

This post has been edited by Ramjade: Feb 18 2021, 11:50 PM

As far as i know it is not. Only foreign currency trading outside authorised by bnm is illegal in malaysia. So buying and selling share using ibkr should not. The only problem lies with remittance and fund placement. So far i have no problem buy and sell share using ibkr. Appeciate if you can share your update

Technically they are neither legal or illegal. They have not been granted license and not regulated by SC to deal with securities in Malaysia. But at the the same time they are not on SC's watch list as per this list they have:
https://www.sc.com.my/regulation/enforcemen...stor-alert-list

So the conclusion is still invest and trade at your own risk. But like others pointed out, SC has a track record of adding BIG and REUPTABLE foreign brokers in their watchlist, and making it very hard for us to invest internationally. Big names in their watchlist include TD Ameritrade (parent is Charles Schwab), Tiger Brokers, Etoro, Futu (the new MooMoo app). It's ridiculous and they just want Malaysians to live in a bubble and only invest locally, with collecting stamp duty and taxes locally only.

Open IKBR Singapore, link with CIMB singapore account, then link back to CIMB Malaysia, done.

Malaysia is too outdated. Not like SG got so many choice broker and cheap fee.

What is the meaning of Illegal ?
By law - illegal can mean a crime to use or practice or be associated. IBKR is not illegal is not illegal in this way.

But IBKR is not legally registered as a company in Malaysia.

from this site:

Q: Is interactive brokers legal in Malaysia?
A: Interactive Brokers does not have an office in Malaysia and is not a member of its Bursa Malaysia stock exchange, so its Malaysian clients cannot trade local markets through this broker.

https://trading-digest.com/interactive-brokers-review

This post has been edited by MUM: Jul 8 2021, 11:37 AM

That's a reason why Singapore is one of the important financial hub on earth and Msia isn't.

The answer pretty much didn't answer anything

Means buyer beware?... not a member of bursa, that means no resolve if things happens?

That’s main reason IRB is taxing ppl savings indirectly

It answers that MY is greedy and they want capital pledge before getting SC approval and tax everyone ridiculously

The last round I have done withdrawal to my Maybank account in 2020 from ibkr. Not sure if it's blocked by BNM now or not. But as someone else said, you can withdraw money to Singapore account. Anyway, don't plan to take the money back from there anytime soon, want to put more money in US stock and SG Bank. So not a problem for me.

As for legality in Malaysia, anything not regulated by Malaysia authority is not legal.

Interactive Broker is an international Tier 1 broker regulated by SEC, FCA and other key financial market country in the world. I am not worry.

It is not some faceless company like TriumphFX regulated by some pirate island in Secyhelles or Cyprus, which are totally worthless and and has less credibility than Malaysia's SC.

IBKR the good thing is regulated in major financial hubs in the world which trumps SC regulation anytime 🤦‍♀️

Not grey area. Just Malaysia SC is stupid and narrow minded.

Actually not stupid...they just don't want you to take money out of the country easily.

This post has been edited by CommodoreAmiga: Feb 3 2023, 06:27 PM