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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!
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.
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
What is FOREX?
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)
Beware Of Illegal Foreign Currency Trading Schemes, Says Bank Negara
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 (firstname.lastname@example.org).
Modus Operandi for Illegal Foreign Exchange Trading Scheme
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
Bank Negara to block illegal currency trading
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 email@example.com.