Forex Brokers in Malaysia (Labuan FSA)

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Forex trading in Malaysia is regarded as legal, provided it is done with a licensed provider. Malaysia is not considered to be a major forex trading hub in Asia. That title probably goes to either Japan or Singapore. However, interest in online trading is picking up, which is why traders must know the suitable forex brokers in Malaysia before starting to trade.

Interest in forex trading in Malaysia picked up during the pandemic, and it has stayed up. A lot of influence on the forex trading environment in Malaysia has come from the neighbouring country Singapore, which is a well-established financial centre in Asia and a major forex trading hub. Many Singaporean star traders regularly present seminars in Malaysia, and this has raised awareness of forex trading in that country.

The State of Regulation of Forex Brokers in Malaysia

FX trading in Malaysia is a regulated activity. The doors to retail forex trading in Malaysia were officially opened when the Central Bank of Malaysia officially allowed retail forex trading in 2012. However, this came with a proviso: traders were to use locally licensed forex brokers and various banks that also provide forex brokerage services.

Well before this pronouncement, the financial markets in Malaysia were overseen by the Securities Commission of Malaysia (SCM), which the 1993 Securities Commission Act set up. Since the formation of this body predated retail forex trading, several modifications to its regulatory powers have occurred. The SCM now oversees and authorises forex brokers in Malaysia to provide homegrown forex brokerage services to Malaysians.

In 2018, the SCM released new guidelines to regulate Malaysia's forex and CFD trading industry. These regulations required forex brokers in Malaysia to have a paid-up capital of at least RM10 million ($2.28 million). Adjusted net capital must also exceed $124,000. Also, brokers in Malaysia that focus solely on CFD trading must have liquid cash equivalent to half of their shareholders' funds. The essence of these financial requirements is to ensure that the brokers are adequately capitalised to handle a surge of withdrawal requests if this happens to be the case at any point in time.

Malaysia has recently created a special zone to house financial services companies. This mimics the scenario seen in Dubai's Financial Centre (DIFC). This special trade zone is the Labuan Business and International Financial Centre (Labuan IBFC). The forex brokers in Malaysia located in this zone are licensed and authorised by the Labuan Financial Services Authority (Labuan FSA).

The Labuan Financial Services Authority was created in 1996 via the Labuan Financial Services Authority act. This agency acts as the regulatory and enforcement authority for all financial services companies operating in the Labuan IBFC.

One great thing about the Labuan FSA's work is that it welcomes discussions with potential forex brokers in Malaysia prior to the submission of applications for a brokerage licence by these firms. This process helps to communicate the expectations of the Labuan FSA with the brokers so they know what is expected of them as they apply for the licence.

What are the Needs of Malaysian Forex Traders?

Since there are few local forex brokers in Malaysia, traders complement the lower numbers by using forex platforms in offshore jurisdictions. However, the needs of Malaysian forex traders remain the same, irrespective of whether locally-based or offshore brokerages are used.

Generally speaking, forex traders in Malaysia want to use brokers that offer them payment channels that work for the country. They also want to trade assets from the Asian region, choosing a good trading platform and flexible trading conditions that do not stifle trading capacity. Consumer protection in the form of regulation is also a need for Malaysian forex traders.

Getting a good forex broker counts for nothing if a payment channel that suits the trader is unavailable. Being an Asian country, Malaysia has some unique preferences regarding payment channels used to fund and withdraw from accounts. Bank cards (MasterCard, Maestro, VISA) are a preferred option for instant deposits. However, the use of UnionPay is gaining some traction. Some local banks issue the UnionPay card.

Bank transfers make up more than half of transactions between traders and forex brokers in Malaysia. Banks such as AmBank, Maybank2u and Public Bank Berhad do the wire transfers. The wire transfers are done online or by physically visiting the bank's branch. The "Dompet digital" methods (e-wallets) are the third option, and these include Skrill, Neteller and PayPal. FasaPay is also available but is not very popular.

There is a large Muslim population in Malaysia. The forex brokers in Malaysia contained in our list are also those who offer forex accounts with Sharia-compliant conditions. Since this forex trading mode should be devoid of interest, these swap-free accounts do not charge or take away an interest rate-based fee for holding overnight positions.

How about the trading platforms? It is not just about the type of platform but whether the platform is mobile-compliant. Mobile and internet penetration in Malaysia has grown by leaps and bounds in the last decade. There was a 50% growth in usage of smartphones between 2015 and 2020, with an ever-increasing spread of the 4G network across the country. This has made MT4 and MT5 on mobile devices very popular. The forex brokers in Malaysia offer all compatible versions of the MT4 and MT5, except the recently delisted versions for the iPhone and iPad.

Trading with a locally-based forex broker in Malaysia confers some element of protection. This comes via the SCM's oversight functions and by provisions of the laws governing the trading of forex and CFDs. These laws mandate forex brokers in Malaysia to segregate customers' funds and also contribute RM30,000 ($6,850) to a Capital Market Compensation Fund. This fund is set up as a form of trader insurance to pay off traders if the brokerage goes bust by some unforeseen circumstance.

What Do the Forex Brokers in Malaysia Offer?

Here is what forex brokers in Malaysia typically offer their clients.

  1. Unlimited access to the MT4 and MT5 trading platforms, especially the mobile versions for Android devices. Access to the MQL marketplace and all the available tools and resources is also guaranteed.
  2. Forex brokers in Malaysia offer high leverage, which can be up to 1:1000 in many cases. Such leverage conditions translate to reducing margin requirements for setting up positions and bringing down the minimum capital requirement for opening an account.
  3. Locally-based forex brokers in Malaysia provide the option of transacting with the local currency, the Malaysian Ringgit. Otherwise, other account currency options will include the US Dollar.
  4. Many brokers offer account segregation, and locally based forex brokers in Malaysia will also provide investor insurance via their contributions to the Capital Market Compensation Fund.
  5. Several same-day funding options are available, including online bank wire platforms and e-wallets.
  6. Those interested in trading the local currency against other majors may be slightly disappointed as the listing of the MYR/USD, MYR/SGD, MYR/EUR and MYR/INR are confined to the platforms of very few large brokers. Instead, there will be a choice to trade other regional currencies, such as the USD/SGD and USD/HKD pairs. Access to other Asian indices such as the Straits Times Index, Nikkei 225 and Hang Seng index is guaranteed with these brokers.
  7. The Securities Commission of Malaysia encourages brokers to offer trading education to their clients. Several forex brokers in Malaysia offer this value-added service.


Forex traders in Malaysia patronise both locally-based brokers and offshore forex brokers that accept and provide brokerage services to Malaysian traders. These are all legally recognised pathways to trading forex in Malaysia. This gives forex traders the option to pick forex brokers in Malaysia that meet their requirements regarding contract specifications, funding options and most importantly, Sharia-compliant trade conditions. Our list of forex brokers in Malaysia has them all. Go through the list and make your selection to start trading forex with your desired trading conditions.