According to BNM (Bank Negara Malaysia), the central bank of the country, buying and trading of foreign currency in the country can only be made through certain agents. This is provided under the Exchange Control Act 1953 which allows only the following to facilitate trading in this market.
- Licensed Commercial Banks
- Islamic Banks
- Investment Banks
- International Islamic Banks
Another agent who allows you to buy and sell foreign exchange is, as stipulated in the Money Services Business Act 2011, through the licensed money services business providers which are known simply as money changers.
On top of that, BNM has clarified that you can trade forex through products that are Syariah-compliant. This can be done through transactions that are licensed and approved by the Syariah Committee of the financial institutions that are endorsed by BNM’s Shariah Advisory Council.
According to Tan Sri Dr Abdul Shukor Husin, the chairman of the National Fatwa Council, Muslims should not engage in forex trading as it had uncertain outcomes. However, they can use money changers or between the banks which are more certain.
BNM has issued a warning to investors not to fall into the Illegal Foreign Exchange Trading Schemes. This is where investors are adviced to refer to BNM if they are not sure if the dealer is authorized. The illegal operator will advertise for employees to join the company in which they will have to then find new investments. Such operators are scams and MUST be reported to BNM for action.
The ‘new employees’ will usually approach their own direct family or friends to help them in investing. It is therefore very important to check with BNM on whether the dealer is authorized. All banks in Malaysia are authorized while clearing houses by BNM to conduct foreign currency trading are BIMB Foreign Currency Clearing Agency Sdn Bhd and RMEX Trading Sdn Bhd.