| Updated: January 15, 2025Malaysia, a country with a thriving economy, has become a major hub for forex trading in recent years and as a result, many local investors are looking for reliable forex brokers to trade with. In this article, we will delve into the legalities and regulations surrounding forex trading in Malaysia, exploring the legal forms of trading, restrictions on derivatives, local regulatory bodies, and the requirements authorized brokers must meet. We will also discuss taxes on profits and provide tips on identifying reliable forex brokers accepting Malaysian clients.
Below you can find a list with Forex brokers regulated in Malaysia:
Top 11 Forex Brokers in Malaysia
-
Fusion Markets
- Australia regulated broker
- MT4, MT5, TradingView, Ctrader
- Leverage up to 500
-
FP Markets
- Australia & CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading Instruments- Forex CFDs
- Shares CFDs
- Metals CFDs
- Commodities CFDs
- Indices CFDs
- Crypto CFDs
- ETF CFDs
-
Global Prime
- Australia regulated broker
- Advanced MT4
- $0 Minimum Account Size
-
Plus500
- Multi-Level Regulated Broker
- Proprietary trading platforms
- Easy to use mobile app
Trading Instruments- CFDs on: Forex
- Crypto
- Indices
- Commodities
- Stocks
- Options
- ETFs
-
Axi
- Raw spreads start from 0.0 pips
- Offers order execution faster than standard ECN model
- Axi Select Funded Trader Program offers funding up to $1 million
Trading Instruments- Forex
- Stocks
- IPOs
- Indices
- Commodities
- Cryptocurrencies
-
FXTM
- Established brokerage company regulated by UK FCA, Kenya CMA, and Mauritius FSC
- MT4, MT5, Mobile Trading Platform
- $1M Lloyd’s of London account insurance
-
Pepperstone
- Australia & CySEC regulated broker
- MT4/MT5, TradingView, Ctrader, Iress
- EUR/USD spread from 0.0 pips
Trading Instruments- Forex
- Indices
- Commodities
- Cryptocurrencies
- Share CFDs
- ETFs
-
eToro
- Popular broker for social trading
- Trading is conducted on innovative in-house platform
- Offers both investing and trading products
Trading Instruments- CFDs on Forex
- Stocks
- Commodities
- Crypto
- ETFs
- and Indices
-
Admirals
- Trade using MetaTrader 4 and 5, as well as Admirals' specialized plugins for additional functionality.
- Access forex, shares, indices, commodities, ETFs, bonds, and cryptocurrency CFDs.
- Admirals is overseen by top-tier regulatory bodies: FCA, ASIC, CySEC, and EFSA, assuring transparency and customer security.
Trading Instruments- CFDs on Forex
- Indices
- Stocks
- Commodities
- Bonds
- ETFs
- Cryptocurrencies
-
BlackBull Markets
- Broker boasting lightning-fast execution speed
- ECN brokers with tight spreads from 0.0 pips
- $0 minimum deposit requirement
Trading Instruments- Forex
- Commodities
- Futures
- Indices
- Stocks
- Cryptocurrencies
-
Vantage FX
- Broker offering some of the lowest spreads from 0.0 pips
- Operating in multiple markets under licenses from tier-1 regulators
- Provides a range of account types with great trading conditions
Trading Instruments- Forex
- Indices
- Commodities
- Shares CFD
- ETFs
- Bonds
Brokers Compared by Spread
| Brand | Commission per lot | |
|---|---|---|
| Fusion Markets | 0.93 avg (Classic) | $0 Classic Account, $4.50 round turn on Zero Account |
| FP Markets | 1.1 | $0 Standard Account; $6 round turn on Pro Account |
| Global Prime | 0.96 avg (Standard) | $0 Standard Accounts; $7 round turn on Raw Accounts |
| Plus500 | 1.2 | $0 |
| Axi | 1.2 | $0 on Standard Account; $7 round trip on Pro Account |
| FXTM | 0.1 | |
| Pepperstone | 1.00 (min) | $0 (Standard Account), $7 round-turn (Razor Account) |
| eToro | 1.0 | $1 or $2 (stocks only) |
| Admirals | 0.1 | $3 per lot |
| BlackBull Markets | 0.1 | $0 Standard; $6 per lot Prime; $4 per lot Institutional |
| Vantage FX | 0.2 | $3 per side on Raw; $1.50 per side on Pro |
FX Brokers Deposit Method Comparison
| Brand | Minimum deposit | |
|---|---|---|
| Fusion Markets |  |
$0 |
| FP Markets | |
$50 (AU$100) |
| Global Prime | |
$0 |
| Plus500 |  |
$100 |
| Axi | |
$0 |
| FXTM | |
$200 |
| Pepperstone | |
$0 |
| eToro | |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
| Admirals | |
$100 ($1 for Invest MT5 Account) |
| BlackBull Markets | |
$0 (Standard)$2,000 (Prime)$20,000 (Institutional) |
| Vantage FX | |
$50 |
Brokers by Regulator
| Brand | Maximum leverage | |
|---|---|---|
| Fusion Markets | |
1:30 (1:500 for forex and metals via VFSC) |
| FP Markets | |
1:30 |
| Global Prime | |
1:500 (1:30 for ASIC entity) |
| Plus500 | |
1:30 |
| Axi | |
1:30 |
| FXTM | |
1:2000 |
| Pepperstone | |
1:30 |
| eToro | |
1:30 (1:400 advanced leverage at Seychelles entity) |
| Admirals | |
1:30 |
| BlackBull Markets | |
1:500 |
| Vantage FX | |
1:30 |
Forex Brokers Platform Availability
| Brand | FX pairs to trade | |
|---|---|---|
| Fusion Markets | |
80+ |
| FP Markets | |
70+ |
| Global Prime | |
56 |
| Plus500 | |
60+ |
| Axi | |
80 |
| FXTM | |
|
| Pepperstone | |
90+ |
| eToro | |
55 |
| Admirals | |
82 |
| BlackBull Markets | |
70+ |
| Vantage FX | |
60+ |
Comprehensive Comparison of the Best Malaysia Forex Brokers
| Brand | Min. Deposit | Trading Platforms | Spread | Regulation | Trustpilot |
|---|---|---|---|---|---|
 |
$0 |
|
0.93 avg (Classic) |
|
|
 |
$50 (AU$100) |
|
1.1 |
|
|
 |
$0 |
|
0.96 avg (Standard) |
|
|
 |
$100 |
|
1.2 | ||
 |
$0 |
|
1.2 |
|
|
 |
$200 |
|
0.1 |
|
|
 |
$0 |
|
1.00 (min) |
|
|
 |
$50 or $100 based on country ($10 for the UK, $1 in the US) |
|
1.0 |
|
|
 |
$100 ($1 for Invest MT5 Account) |
|
0.1 |
|
|
 |
$0 (Standard)$2,000 (Prime)$20,000 (Institutional) |
|
0.1 |
|
|
 |
$50 |
|
0.2 |
|
Legal Forms of Forex Trading in Malaysia
Forex trading is a legal activity in Malaysia, provided that locals use properly authorized brokers. The Malaysian government has put in place regulations to ensure that trading is conducted in a fair and transparent manner, and that residents are protected from unlicensed and shady brokerage firms. As a result, local traders can confidently participate in the global forex market, facing a wide range of ways to buy and sell currencies.
- Spot Trading
One of the most common forms is trading forex on the spot market, where currencies are exchanged at current market prices. This form of trading entails ownership of the underlying assets and allows Malaysians to take advantage of short-term price fluctuations. It is often used by traders who want to capitalize on intraday price movements.
In spot trading, the exchange of currencies is done on a spot basis, meaning that the transaction is settled almost immediately, or “on the spot”. The settlement period for spot trades is typically two business days. For example, if a Malaysian trader buys the USD/MYR currency pair on a Monday, the settlement would typically occur no later than Wednesday.
- Currency Futures
In addition to spot trading, Malaysians can also engage in futures trading, where currency pairs are exchanged at a predetermined price, with the settlement occurring at a specified future date. This provides them with a way to hedge against potential losses or gains, as well as speculate on future price movements.
Malaysian investors can trade Foreign Currency Non-Deliverable (FCNH) futures, which are a type of derivative instrument that allows them to hedge against or speculate on the movement of foreign currencies. FCNH futures are cash-settled, meaning that the settlement is made in cash rather than physical delivery of the currency.
FCNH futures are traded on the Bursa Malaysia Derivatives, and offer a range of benefits, including leverage, liquidity, and flexibility. Locals can trade FCNH futures on a variety of currency pairs, including the US dollar, euro, yen, and others. The contracts are typically settled in Malaysian ringgit, and the margin requirements are relatively low, making it accessible to a wide range of investors.
- Currency Options and Forwards
Currency options are another popular form of forex trading in Malaysia, where traders have the right, but not the obligation, to buy or sell a currency at a predetermined price. This allows for flexibility and risk management, as traders can choose to exercise their option or let it expire. Forwards, which are customized contracts between two parties to exchange currencies at a predetermined price, with settlement occurring at a specified future date, are also available to Malaysians.
Restrictions on Currency Trading in Malaysia
The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) have implemented restrictions on currency trading in Malaysia. One notable restriction is on Contract for Difference (CFD) trading, which can only be based on underlying assets such as shares, indices, and commodities. The maximum leverage for these instruments is restricted to 1:50.
CFDs based on currencies are not permitted, except for those that are specifically approved by the SC. Additionally, there are restrictions on ringgit trading, which can only be conducted through authorized dealers and with the approval of BNM. These restrictions aim to protect investors and maintain stability in the Malaysian financial markets.
Who Regulates Forex Trading in Malaysia?
The Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM) are the primary regulatory bodies responsible for overseeing forex trading in the country. The SC was established in 1993 under the Securities Commission Act 1993, while BNM was established in 1959 under the Central Bank of Malaysia Act 1958.
The SC is responsible for regulating the securities and derivatives markets, including forex brokers, stock brokers, fund management companies, and investment advisors. The BNM is tasked with overseeing the banking and financial systems as well as payment systems operators and e-money issuers.
Both regulators have a structure in place to ensure the effective supervision and enforcement of regulations, with the SC comprising a board of commissioners and the BNM comprising a board of directors. Their regulatory responsibilities include licensing forex brokers, monitoring trading activities, and enforcing compliance with regulations.
The Labuan Offshore Financial Services Authority (LOFSA) is a separate regulatory body that oversees the offshore financial sector in Labuan, Malaysia. Its primary responsibilities include licensing and regulating offshore banks, insurance companies, and other financial institutions.
LOFSA ensures compliance with anti-money laundering and know-your-customer regulations, and maintains the integrity and stability of the offshore financial system. It also provides a framework for the development of the offshore financial sector, promoting Labuan as a reputable and attractive destination for international financial services.
Requirements for Forex Brokers in Malaysia
To establish a forex broking company in Malaysia, brokers must demonstrate a comprehensive understanding of the country’s regulatory framework and meet stringent requirements. A key prerequisite is obtaining a license from the relevant authorities, which involves meeting minimum capital requirements of RM500,000.
Brokers must also implement robust internal controls, risk management systems, and transparent policies, including clear disclosure of spreads, commissions, and fees. A physical presence in Malaysia is required, with a registered office in the country and knowledgeable staff.
The licensing process is rigorous, involving a thorough evaluation of the broker’s business plan, financial resources, and management team. Regulatory authorities assess the broker’s ability to comply with anti-money laundering, know-your-customer procedures, and risk management requirements, ensuring a secure and fair trading environment for local clients.
Are There Taxes on Profits from Forex Trading in Malaysia?
In Malaysia, profits from forex trading are subject to income taxes. The Inland Revenue Board of Malaysia (IRB) considers forex trading to be a business activity, and profits are taxable under the Income Tax Act 1967. The tax rate ranges from 1% to 28%, depending on the resident’s tax bracket. Forex profits under RM5,000 do not attract income taxes.
Non-residents of the country are taxed at a higher fixed rate of 30%. The 182-day rule applies when determining traders’ residency status. If a person has spent less than 182 days in Malaysia within a given year, they are considered a non-resident. It is essential to note that tax laws and regulations can change. Traders should consult with an experienced tax professional to ensure compliance with current tax laws.
How to Identify Reliable Forex Brokers Accepting Malaysian Clients
To identify reliable forex brokers, Malay clients should look for a license from the local regulators, such as the SC or LOFSA. Price transparency is also essential, with trusted brokers typically providing clear and competitive spreads and commissions. Locals can search the licensee registers of the SC or LOFSA websites to verify a broker’s current regulatory status.
Additionally, Malaysian traders can also check the SC’s Investor Alert List, which provides information on unlicensed and unregistered brokers unlawfully targeting the local market, as well as those that have been suspended or revoked.
Malaysians can contact the SC directly to verify a broker’s license or to report any suspicious activities. They can send the regulator a snail mail at 3 Persiaran Bukit Kiara, Bukit Kiara, 50490 Kuala Lumpur, call on the phone (+603 6204 8000), or write an email ([email protected]).
Last but not least, traders should check for negative reviews, ensure that the broker offers a range of trading platforms, and provides adequate customer support. By following these steps, Malaysians can find a reliable forex broker that meets their trading needs and provides a safe and secure trading environment.
FAQ
Will Malaysian forex traders get in trouble for trading with unregulated brokers?
Trading with unregulated brokers is highly discouraged by the Securities Commission Malaysia (SC). While it’s not necessarily illegal, it poses significant risks, including loss of funds, lack of protection, and difficulty in recovering assets. The SC may take action against unregulated brokers, but its primary focus is on protecting Malaysian investors rather than persecuting them for trading with offshore firms.
What forex trading platforms are available to Malaysians?
Malaysian traders have access to a wide range of trading platforms, including popular options such as MetaTrader, cTrader, and NinjaTrader, which offer advanced charting tools, automated trading capabilities, and mobile trading apps. Additionally, many Malaysian brokers also offer their own proprietary platforms, which cater to the specific needs of local traders.
Is trading currency CFDs legal in Malaysia?
Trading currency CFDs is heavily restricted in Malaysia. Local traders are generally allowed to trade CFDs for underlying assets like shares, certain commodities, and indices. As a result, residents are limited to trading other financial instruments, such as spot forex, futures, forwards, and options, with licensed brokers.
Is the Malaysian ringgit available as a base currency at many forex brokers?
The Malaysian ringgit (MYR) is not commonly offered as a base currency at Forex brokers, as most typically offer major currencies such as the dollar, euro, and yen. However, some brokers that cater to the Asian market may offer MYR as a base currency, allowing Malaysians to transact in their local currency.
What deposit methods are available to Malaysian forex traders?
Malaysian forex traders have access to a variety of deposit methods, including local online banking services such as Maybank2u, CIMB Clicks, and Hong Leong Online. Popular e-wallets like Fasapay and Skrill are also available at some brokers. Additionally, many brokers also accept deposits via bank transfers and credit/debit cards, such as Visa and Mastercard.
Why You Should Trust RationalFX
When it comes to making informed decisions about forex brokers, it’s essential to rely on trustworthy sources. RationalFX, a company with over 17 years of experience since its founding in 2005, has established itself as a credible authority in the industry. With an impressive collection of over 2500 reviews on Trustpilot, boasting a score of 4.2, it’s clear that Rational FX has built a reputation for providing reliable and unbiased information.
What sets Rational FX apart is its rigorous evaluation process, which considers over 30 different criteria when selecting forex brokers. This comprehensive approach ensures that every aspect of a broker’s service is taken in consideration, including regulation, forex spreads, trading platforms, deposit methods, and reputation. With its wealth of experience, transparent review process, and outstanding customer feedback, Rational FX is a trusted source for anyone seeking reliable information on forex brokers. You can reach us via e-mail at [email protected] or contact us through our social media accounts here: Facebook, YouTube, or leave a feedback here.