Beware Of Illegal Foreign Currency Trading Schemes| Warning from Bank Negara Malaysia
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Please be careful when you are dealing with an unauthorized foreign currency dealer.
Bank Negara Malaysia has issue a warning that it is an offence if you did so!
The central bank warned the public not to participate in any illegal investment or training programme on foreign currency trading offered by individuals or companies, either domestic or foreign.
It said that people were usually attracted to attend such investment or training programmes with promises of quick and good returns.
Some of this programmes maybe cost even above two thousand ringgits. A lot of oversea FOREX “Guru” give seminars or workshops in the five star hotels.
If you have money to invest, invest wisely so that your money is safe and give decent return.
Do not be cheated, persuaded or forced into investing your hard earned money in ‘high and quick return’ investments such as in foreign currency trading(FOREX) scams.
In Malaysia, all foreign currency dealings must be made with or through an authorised dealer.
A person (individual or company) who is not an authorised dealer is not allowed to offer services or trade in foreign currency.
Foreign currency trading refers to activities involving the investment of monies/funds in foreign currency with the objective of getting high returns from movements in exchange rates.
Hence, if you have been approached to invest your money in foreign currency, it is most definitely a foreign currency trading scam!
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HOW TO DETECT ILLEGAL OPERATORS
These illegal operators/companies 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.
In many of the cases referred to Bank Negara Malaysia, employees who are not able to get clients will resort to borrowing from their parents or close family members to invest.
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WARNING SIGNS FOR INVESTORS
Illegal operators of foreign currency trading scams 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
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What is FOREX?
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The modus operandi included offering free or paid training, seminars or workshops to investors prior to inviting them to set up an online foreign currency trading account with a principal company, purported to have a valid licence to trade foreign currency overseas.
Bank Negara said the companies would also provide convenient access to their principals’ websites and trading facilities to facilitate online foreign currency trading by the investors.
They also tended to recruit fresh graduates as marketing executives, encouraging the latter to get their family members and friends to trade foreign currency. Normally in their Recruitment Advertisement, they would never mention about FOREX trading.
Investors were required to deposit an amount of money into a bank account to begin trading foreign currency and subsequently asked to top up their initial investment, or margin call, to avoid losing their capital.
Under the Exchange Control Act 1953, it is an offence for a person in Malaysia to buy or sell foreign currency or do any act which involves, is in association with, or is preparatory to buying or selling of foreign currency with any person other than an authorised dealer.
It is also an offence for a person to aid or abet another person to buy or sell foreign currency with any person unless that person is an authorised dealer.
List of Authorised Dealers of Foreign Currency Pursuant to Section 2 of the Exchange Control Act 1953
- Affin Bank Berhad
- Affin Investment Bank Berhad
- Affin Islamic Bank Berhad
- Al Rajhi Banking & Investment Corporation (Malaysia) Berhad
- Alliance Bank Malaysia Berhad
- Alliance Investment Bank Berhad
- Alliance Islamic Bank Berhad
- AmBank (M) Berhad
- AmInvestment Bank Berhad
- AmIslamic Bank Berhad
- Asian Finance Bank Berhad
- Bangkok Bank Berhad
- Bank Islam Malaysia Berhad
- Bank Muamalat Malaysia Berhad
- Bank of America Malaysia Berhad
- Bank of China (Malaysia) Berhad
- Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad
- CIMB Bank Berhad
- CIMB Investment Bank Berhad
- CIMB Islamic Bank Berhad
- Citibank Berhad
- Deutsche Bank (Malaysia) Berhad
- ECM Libra Investment Bank
- EON Bank Berhad
- EONCAP Islamic Bank Berhad
- Hong Leong Bank Berhad
- Hong Leong Investment Bank Berhad
- Hong Leong Islamic Bank Berhad
- HSBC Amanah Malaysia Berhad
- HSBC Bank Malaysia Berhad
- Hwang-DBS Investment Bank Berhad
- J.P. Morgan Chase Bank Berhad
- KAF Investment Bank Berhad
- Kenanga Investment Bank Berhad
- Kuwait Finance House (Malaysia) Berhad
- Malayan Banking Berhad
- Maybank Investment Bank Berhad
- Maybank Islamic Berhad
- MIMB Investment Bank Berhad
- OCBC Bank (Malaysia) Berhad
- OSK Investment Bank Berhad
- Public Bank Berhad
- Public Investment Bank Berhad
- Public Islamic Bank Berhad
- RHB Bank Berhad
- RHB Investment Bank Berhad
- RHB Islamic Bank Berhad
- Standard Chartered Bank Malaysia Berhad
- Standard Chartered Saadiq Berhad
- The Bank of Nova Scotia Berhad
- The Royal Bank of Scotland Berhad
- United Overseas Bank (Malaysia)
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Beware Of Illegal Foreign Currency Trading Schemes, Says Bank Negara
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Bank Negara Malaysia has advised the public to not participate in any illegal investment or training programme on foreign currency trading offered by individuals or companies.
In a statement here on Monday, the central bank said members of the public are usually enticed to attend such investment or training programmes with promises of quick and good returns.
It said the modus operandi of such programmes has been to offer free training, seminars or workshops to lure investors, prior to inviting them to set-up an online foreign currency trading account with a principal company.
The company has purportedly a valid licence to trade in foreign currency overseas.
It also includes providing convenient access to the principal company’s website and facilitate online foreign currency trading by investors as well as the recruitment of fresh graduates as marketing executives.
The graduates are also encouraged to get their family and friends to trade in foreign currency.
Such programmes also require investors to deposit an amount of money into a bank account to begin the trading in foreign currency and subsequently, requesting for a top up on their initial investment (margin call) to avoid losing the capital.
Under the Exchange Control Act 1953 (ECA), it is an offence for a person in Malaysia to buy or sell foreign currency or engage in any act which involves, is in association with, or is preparatory to, the buying or selling of foreign currency with any person, other than an authorised dealer.
It is also an offence for a person to aid or abet another to buy or sell foreign currency with anyone, unless the individual is an authorised dealer.
The list of authorised dealers and financial institutions permitted by the Controller of Foreign Exchange to buy or sell foreign currency can be obtained from Bank Negara Malaysia’s website (http://www.bnm.gov.my/fxadmin).
For further enquiries, members of the public can contact Bank Negara Malaysia at 1-300-88-5465 or e-mail (bnmtelelink@bnm.gov.my).
from:bernama.com/bernama/v5/newsindex.php?id=465865
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Modus Operandi for Illegal Foreign Exchange Trading Scheme
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Illegal foreign exchange trading schemes contravene Section 4(1) of the Exchange Control Act 1953. This involves the act of buying or borrowing foreign currencies from or selling or lending currencies to unauthorized dealer.
Illegal foreign exchange trading schemes also contravenes Section 4(2) of the Exchange Control Act when the unauthorized dealer does an act that involves, is in association with, or is preparatory to, buying or borrowing foreign currencies from, or selling or lending foreign currencies to, any person outside Malaysia.
Dealers authorised to conduct foreign currency trading in Malaysia are as follows:
- All commercial banks
- All Islamic banks
- Bank Islam Malaysia Berhad
- Bank Muamalat Malaysia Berhad
Clearing houses authorised to conduct foreign currency trading with authorized dealers in Malaysia are as follows:
- BIMB Foreign Currency Clearing Agency Sdn Bhd
- RMEX Trading Sdn Bhd
The modus operandi for illegal foreign exchange trading schemes include:
- Illegal operators usually operate on a small scale and claim they can provide remittance services efficiently, without the need for any documents or identification. They rarely use documents to validate and verify the transactions. By engaging in these transactions, customers run the risk of being cheated and their funds may never reach its intended destination.
- Illegal operators usually target job seekers by placing attractive advertisements to lure prospective employees to join the company, after which they use them to solicit for new investments. Most often, employees will be encouraged to approach their direct family, relatives and friends before targeting members of the public.
- Illegal operators usually portray a professional and reputable image, a high-tech office layout and advanced IT facilities, such as a LCD screens displaying movements in exchange rates to provide the impression that a legitimate and real business is being conducted. These facilities are merely a false front.
- Investors can either trade using their trading accounts with the company or through dealers appointed by the company. In some cases, investors are allowed to operate their accounts via the Internet.
- Investors are also required to sign a business contract which is normally entered between the investors and a principal company overseas.
- In most instances, the operators will inform the investors that they will have to send these contracts to its principal company overseas for signing. However, such contracts are usually left unsigned.
- As such, in the event the investors are unhappy with future dealings and transactions, no action can be taken against the company as there is no binding contract between them.
- Investors will usually get high returns on their initial investments. This will convince them to increase their investments in hopes of higher returns. Eventually, they will end up losing everything when the illegal operators suddenly go missing.
- Investors who lose their money through purported volatility of exchange rate movements are informed by the illegal operators that they need to pay margin-call in order to recover their paper loss
- The illegal operators may also encourage investors to increase their investment to try to recover their losses.
- from: bnm.gov.my/index.php?ch=232&pg=743&ac=693#fx
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Bank Negara to block illegal currency trading
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Bank Negara is coming down hard against companies or individuals – domestic and foreign – that organise investment or training programmes on illegal foreign currency trading.
The central bank advised the public not to participate in such schemes, adding the people were usually enticed by such marketing gimmicks which promised quick returns and gains.
It is an offence under the Exchange Control Act to buy or sell foreign currency or do any act involving or related to buying or selling of foreign currency with any person other than an authorised dealer, according to Bank Negara.
“It is also an offence for a person to aid or abet another person to buy or sell foreign currency with any person, unless the person is an authorised dealer,” the central bank’s corporate communications department said in a statement yesterday.
Among the methods used by the illegal investment operators to attract investors are free training, seminars or workshops before inviting them to set up an online foreign currency trading account with a principal company which purportedly has a valid licence to trade foreign currency overseas.
Such schemes also provided access to the principal company’s website and trading facilities to facilitate online foreign currency trading.
Others recruit fresh graduates to market and sell the schemes and encourage them to get their family and friends to trade foreign currency.
There are also schemes that require investors to deposit a sum of money into a bank account before allowing them to start trading and subsequently, requesting for a top-up on their initial investment (margin call) to avoid losing their capital.
There is a list of authorised dealers and financial institutions permitted by the Controller of Foreign Exchange to buy or sell foreign currency on Bank Negara’s website bnm.gov.my.
For further enquiries, contact Bank Negara Malaysia at 1-300-88-5465 or send an e-mail to bnmtelelink@bnm.gov.my.
from:thestar.com.my/news/story.asp?file=/2010/1/5/nation/5413039&sec=nation
Players ask Government to liberalise forex trading
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Foreign exchange (forex) traders in the country are upset over a recent Bank Negara caution on forex trading and want the Government to liberalise the domestic forex trading sector.
The central bank had recently cautioned the public not to participate in any illegal investment or training programme on foreign currency trading offered by individuals or companies, both domestic and foreign.
In a random survey by StarBizWeek, forex traders, primarily online traders, questioned why the Government was “painting all forex traders with one brush as illegal just because of a few scams that happened.”
“The government said that there are authorised dealers but they are all banks. They do not have a forex trading system which assists and allows users to trade whenever and wherever.
“What we need are forex dealers like in other countries,” one forex trader said.
Another forex trader said traders were “not trading in ringgit, they do not take money from the public for trading and they do not act as a broker in Malaysia.”
Some traders in the country have been trading with legal foreign forex brokers such as those affiliated with and authorised by the National Futures Association (NFA), an industry-wide, self-regulatory organisation for the US futures industry.
Local traders are hoping for something similar, so that they can be authorised by the Government and work within an official domestic framework for private forex trading.
This would allow Malaysians to tap legally into the “US$3 trilion to US$4 trillion a day forex market,” local traders said.
fr:biz.thestar.com.my/news/story.asp?file=/2010/1/9/business/5432021&sec=business
Expert: Capital outflow normal during crisis
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Recent reports of capital outflow from Malaysia are not as worrisome as data suggest rational reasons for money leaving the country.
In a note yesterday, CIMB Research said the outflow of capital was mainly due to investors reacting during the heights of the global financial crisis and Malaysians investing abroad.
“The decline in reserves was to be expected given the massive outflow of portfolio capital from both the equity and bond markets as investors showed high-risk aversion in the face of worsening financial turmoil in the second half of 2008,” said chief economist Lee Heng Guie in a note.
“It is not unusual that capital flows reverse during periods of uncertainty as investors will turn away from risk.”
Lee’s note comes after UBS released two reports in the past six days that focused on the vast sums of money leaving the country that led to a big decline in Malaysia’s foreign exchange reserves.
Lee said foreign reserves plunged US$9.8bil in 2008 and fell US$3.8bil between January and April 2009 before turning the corner in May last year as investor sentiment on emerging markets improved following the easing of global deleveraging.
Between July 2008 and April last year, reserves fell US$38.1bil or 17.1% of gross domestic product (GDP) before reversing to a net increase.
Lee said the portfolio outflows between the second quarter of 2008 and the second quarter of 2009 amounted to RM132.5bil. It said outflows were normal during times of uncertainty and when conditions improved, so did the flow of capital.
It said private capital registered a net inflow of RM18.6bil in the third quarter of 2009 on the prospects of relatively better returns and growth outlook as well as improved risk appetite. The net inflow was mainly due to the issuance of debt securities by Malaysian multinational companies.
Another aspect of money leaving the country is due to more investments by Malaysians abroad.
Lee said direct investments abroad by Malaysian companies increased 62.7% per year in 2006 to 2008 to RM110.5bil and rose further to RM21.8bil in January to September 2009, surpassing that of foreign direct investment into Malaysia for three successive years since 2007.
Lee said over time, companies were expected to repatriate profits back into the country.
The note also said there was no sign of massive capital flight as the measurement that indicated this did not do so.
Lee said that from “errors and omissions (E&O)” in the balance of payments account, he saw no strong evidence of massive capital flight as E&O was between 0.3% and 2.1% of total merchandise trade, well within the 5% rule of thumb.
He said the accumulation of reserves could be rationalised as insurance against balance of payment shocks and allowed the Government to smooth domestic absorption in crises.
Lee said the reserve level of US$96.7bil as at end-December last year was sufficient to finance 9.8 months of retained imports and was 4.1 times the short-term external debt and the reserves to GDP ratio of 47.7% more than satisfied the reserves level considered as optimal.
“The cost of holding excessive reserves is high in terms of sterilising the foreign inflows due to interest rate differentials between domestic and overseas,” he said.
fr:biz.thestar.com.my/news/story.asp?file=/2010/1/15/business/5477463&sec=business
Beware of too-good-to-be-true deals, investors told
KUALA LUMPUR: Greed and the allure of easy money from financial markets are the main reasons many supposedly savvy investors fall prey to fictitious trading companies.
Recently, the Kuala Lumpur High Court ordered the restitution of RM2.2mil to 14 Australian investors who were defrauded in the investment scam by Cambridge Capital Trading, which was purportedly based in the United Kingdom.
The Securities Commission (SC) began investigation in February 2007 following complaints lodged by the Australian Securities and Investment Commission and the Dubai Financial Services Authority.
Cross-border investigations by the SC revealed that cold calls were made to investors in Australia and Singapore by individuals claiming to be from Cambridge Capital Trading, purportedly a member of the Dubai Options Exchange, offering investments in, among others, options in the Australian Dollar.
The investors had deposited their money into a CIMB Bank Bhd account in Kuala Lumpur. These accounts have now been frozen. An order has been served for the release of the monies to the 14 investors.
“Investors need to be very careful,” said Federation of Investment Managers Malaysia executive director Lee Siew Hoong.
“When there is a deal that is too good to be true, investors should be mindful. When you see advertisements in the newspapers of these companies proclaiming they can give 15% to 25% returns per annum, you should start to be cautious.”
He added that greed was normally the main cause of investors falling prey to such scams. “Once the money has been deposited into the accounts of these scam companies, it is very difficult to recover. As they are very mobile in nature, it is hard to track and catch them,” he said.
In the case of ficticious London firm Cambridge Capital, the fraudsters had set up fake website called Dubai Options Exchange, fake regulator called United Arab Emirates Commodity Futures Board and Cambridge Capital that claimed to offer financial services within the Dubai International Financial Centre.
To further disguise the scam, electronic answering devices, a phoney facsimile and false billing addresses for the websites were set up in Dubai, the United Kingdom and the United States.
Australians were among those who received cold calls from representatives of Cambridge Capital to persuade them into investing money in offshore options trading.
A fund manager explained that these criminals usually create a database on potential victims by stealing personal information.
“A professional-looking website is created to fool potential victims. The criminals then make cold calls to draw victims to the site,” he said.
Once hooked, the victim sends money to a bank account. Victims may even be sent “earnings statements” to prove its validity and hence, encourage them to send more money.
He added that victims only discovered they had been conned when they attempted to cash out.
fr:biz.thestar.com.my/news/story.asp?file=/2010/4/30/business/6160070&sec=business
E-broking for foreign forex brokerages
KUALA LUMPUR: Bank Negara will allow foreign electronic brokers to offer their electronic broking platforms for wholesale interbank trading in Malaysian foreign exchange (forex) market from July 1.
The central bank said the move was aimed at enhancing the participation of new players to “further increase the dynamism and competitiveness of this market”.
“This flexibility will promote greater trading activities, as electronic trading platform increases transparency, improves market efficiency and lower transaction cost for participants,’’ it said in a statement yesterday.
Foreign electronic brokers interested to provide such service can submit their applications to Bank Negara, in line with the requirement of the Banking and Financial Institutions Act 1989.
fr:biz.thestar.com.my/news/story.asp?file=/2010/6/26/business/6551733&sec=business
Bank Negara liberalises forex administration rules
KUALA LUMPUR: Bank Negara yesterday liberalised further the foreign exchange administration rules to increase business efficiency and enhance competitiveness.
With immediate effect, the central bank would allow ringgit (in addition to foreign currency) as a currency of settlement for international trade between residents and non-residents.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said this was to “promote local currency settlement of trade to facilitate the management of currency mismatches and reduce currency conversion costs of exporters and importers.”
The central bank would also allow resident companies to obtain any amount of foreign currency loans from non-resident non-bank related companies.
Zeti said at a press briefing following the announcement of the second quarter ended June 30 gross domestic product data that this was to provide for greater flexibility for competitive financing and enhance the management of financial resources within the corporate group.
Bank Negara has also abolished the limit on anticipatory hedging of current account transactions by residents with licensed on-shore banks.
In a separate statement yesterday, the China Foreign Exchange Trade System (CFETS) announced that trading between the renminbi and ringgit would also be listed on the interbank forex market for trade settlement purposes.
Bank Negara said later in the evening that “the announcement by CFETS will accord ringgit as the first Asian currency (apart from the Hong Kong dollar) to be listed by CFETS.”
The central bank said besides the Hong Kong dollar, the other currencies traded on the CFETS were the US dollar, euro, pound sterling and yen.
fr:biz.thestar.com.my/news/story.asp?file=/2010/8/19/business/6882350&sec=business
No fee for unilateral wa’d currency hedging
By ELAINE ANG
Upfront cash payment can lead to a bilateral concept, says council
PETALING JAYA: Islamic financial institutions can enter into forward foreign currency transactions for hedging purposes based on unilateral wa’d (promise) but no fee is to be charged on the promisee, according to Bank Negara’s Syariah Advisory Council.
The unilateral wa’d carries a binding effect on the promisor.
Islamic banks tend to levy a payment when a wa’d is made to enter into a forward foreign currency hedging contract to reflect the parties’ commitment to the transaction.
However, the council, whose rulings are binding on the country’s Islamic banks, said in a statement that such fees were not to be charged on the promisee in view that upfront cash payment for forward currency transaction would lead to a bilateral wa’d which was not allowed by syariah.
This is in line with the view of the majority of ulamas who opined that unilateral-binding wa’d without any consideration was permissible in a forward currency transaction.
The decision on the application of wa’d in forward currency transactions was made in its meeting held on June 22.
A bank official who declined to be named said the move ensured that Islamic financial institutions were now more compliant with the syariah ruling.“This is good for the industry as a whole,” he said.
An industry observer said Islamic financial institutions might build the charges into their fee or pricing structure itself.
“Therefore payment of the fee is deferred as part of the pricing for the underlying transaction,” he said.
The council has also resolved that the payment of takaful benefits from participants’ risk fund (which pools participants’ tabarru’ (donation) contributions to meet claims by participants), can be made contingent upon specific events beyond those arising from a defined financial loss or a misfortune.
“This is allowed subject to the agreement by the contracting parties, that is, the participants,” the council said.
The decision is made in line with the feature of the takaful contract which is established based on concept of tabarru’ and ta’awuni among the participants.
These two concepts allow participants to agree on the events leading to payment of the takaful benefits.
The terms and conditions outlining the respective events must be made transparent to all the contracting parties in the takaful contract.
Thus, with the agreement from the participants, the scope of events prompting payment of takaful benefits from the participants’ risk fund is not only limited to death, disability or calamity, but can also be extended to cover attainment of the contracted mandate.
fr:biz.thestar.com.my/news/story.asp?file=/2010/8/27/business/6930385&sec=business
No forex trading for Muslims
KOTA BARU: The National Fatwa Council has ruled that foreign exchange trading (forex trading) is forbidden or haram for Muslims.
Council chairman Tan Sri Dr Abdul Shukor Husin said forex trading was against Islamic law.
“A study by the committee found that such trading involves currency speculation, which contradicts Islamic law.
“For that reason, the National Fatwa Council has decided that it is haram for Muslims to participate in such trading,” he said after chairing the Council’s 98th conference here yesterday.
Abdul Shukor said Muslims should not participate in forex trading as there were many doubts about it, given that it involved individuals using the Internet with uncertain outcomes.
“Other forms of trading in foreign currencies, such as trading by money changers or between banks, are permissible as they do not involve currency speculation or uncertain outcomes,” he said.
He said the meeting also decided that it was permissible for Muslims to invest or save under the Premium Saving Certificate scheme by Bank Simpanan Nasional (BSN).
He said the committee was satisfied with the briefing given by the Bank Negara’s syariah panel regarding the scheme’s implementation.
He added that the committee also agreed to formulate guidelines on Muslim couples having their wedding ceremony in a mosque to allay doubts that the ceremony purportedly follows Christian practices. — Bernama
fr:thestar.com.my/news/story.asp?file=/2012/2/16/nation/10747413&sec=nation
Fatwa Council clarifies that only 1 type of forex trading is ‘haram’
February 16, 2012
KUALA LUMPUR, Feb 16 — The National Fatwa Council clarified that only real-time individual spot foreign exchange (forex) electronic transactions were “haram” (prohibited).
It was reported yesterday that the council ruled that foreign exchange trading (forex trading) is haram for Muslims.
Chairman Tan Sri Dr Abdul Shukor Husin, in statement today to Bernama Online, said that the ruling was made on the specific type of trading because there were doubts on whether it conformed to Islam and Malaysian laws.
He said that his initial statement was misreported and made it to appear that all forex trading was prohibited to Muslims.
He said further the ruling did not affect forex trading by money changers and licensed banks.
Earlier today Bank Negara stated that trading foreign currencies was permissible if done by licensed commercial banks, Islamic banks, investment banks and international Islamic banks as regulated by the Exchange Control Act 1953.
Money changers can also do forex trading as spelt out in the Money Services Business Act 2011, Bank Negara added. fr:themalaysianinsider.com/malaysia/article/fatwa-council-clarifies-that-only-one-type-of-forex-trading-is-haram/
Bank Negara Explains Foreign Currency Trading Status
KUALA LUMPUR, — Bank Negara Malaysia clarified that buying and selling of foreign currency in Malaysia is only allowed with licensed commercial banks, Islamic banks, investment banks and international Islamic banks as provided for under the Exchange Control Act 1953.
Such trading is also allowed with licensed money services business providers (money changers) as provided for under the Money Services Business Act 2011.
In addition, Shariah-compliant financial products, including foreign exchange related transactions, offered and transacted by licensed Islamic financial institutions are approved by the Shariah Committee of the respective financial institutions with endorsement from the Shariah Advisory Council of Bank Negara Malaysia, it said in a statement today.
The clarification followed a report yesterday that the National Fatwa Council ruled that foreign exchange trading is forbidden for Muslims.
Council chairman, Tan Sri Dr Abdul Shukor Husin, said Muslims should not engage in forex trading as there are many doubts about it and that it involved individuals using the internet, with uncertain outcomes.
However, he said other forms of trading in foreign currencies, such as by money changers or between banks, are permissible, as they do not involve currency speculation or uncertain outcomes.
— BERNAMA
fr:malaysia-chronicle.com/index.php?option=com_k2&view=item&id=28214:bank-negara-explains-foreign-currency-trading-status&Itemid=3
People still falling prey to get-rich-quick scams
Despite extensive media coverage of scams related to foreign exchange, gold trading and get-rich-quick schemes, people continue to fall prey.
On July 31, an airline clerk lost RM52,000 in a forex scam involving a Singaporean broker.
The man, who wanted to be known only as Mohamed, said that he had first deposited RM11,000 into the broker’s bank account in 2009, and by the following year he had lost RM52,000.
On July 30, actor Ady Putra lodged a police report that he had lost RM19,000 after investing in an online get-rich-quick scheme.
On July 13, a Sessions Court here sentenced Cameroonians Emmanuel Tsckenkure and Camara Souleymane to four months’ jail and a fine of RM5,000 after they pleaded guilty to using counterfeit money.
They were allegedly trying to scam people into investing US$100,000 (RM319,000) for a “guaranteed” return of RM1mil.
Penang MCA Public Services and Complaints Bureau deputy chief Lim Thoon Deong called on Bank Negara to issue precautions on forex trading to raise public awareness on its complexities.
Recently, a gold scam came to light when a local bank revealed that it had incurred losses amounting to RM75mil following purchase of fake gold via its Islamic pawn-broking service. fr:thestar.com.my/news/story.asp?file=/2012/8/7/nation/11809620&sec=nation