BNM includes OctaFX on its alert list: what does it mean for investors?
What are the implications of OctaFX’s inclusion in the Bank Negara Malaysia’s alert list for traders in Malaysia? Learn whether OctaFX is a scam broker or not in this article.
OctaFX, along with XM, FBS, and Bold Prime, has been mentioned on the Bank Negara Malaysia Financial Consumer Alert List and the Securities Commission Investor Alert List.
This news triggered concerns for Malaysian traders, who now seek clarity on OctaFX. In this article, we delve into OctaFX’s case and provide an extensive examination of the Forex investing sphere in Malaysia to determine the legitimacy of OctaFX as a broker.
Licensing challenges for international brokers in Malaysia
The alert lists maintained by Bank Negara Malaysia and the Securities Commission aim to inform the public about unlicensed entities and entities not regulated by these institutions. However, the presence of brokers on these lists does not necessarily imply such a broker is a scam. Like many other international brokers, OctaFX holds valid licenses from reputable bodies such as FSCA in South Africa and CySEC in Cyprus, assuring its credibility and safety for traders.
So, why do established international brokers, including OctaFX, refrain from obtaining licenses from BNM or the SC? The answer lies in the absence of licensed Forex brokers in Malaysia. There are no online brokers authorised to provide derivative trading services, despite this activity falling under the regulatory purview of the Securities Commission.
Obtaining a license in Malaysia is challenging due to stringent regulatory requirements, making it unprofitable for brokers. Additionally, intense competition from international brokers with more attractive conditions may further discourage the pursuit of local licenses. Alternatively, the Securities Commission’s may just reject licence applications from brokers due to its internal policies.
Consequently, Malaysian traders and investors are deprived of a widely popular investment avenue, as evidenced by OctaFX’s extensive client base in 180+ countries. Despite this limitation, they continue to use OctaFX and other online platforms, which currently remain legal. In the future, a reevaluation of licensing frameworks could incentivize brokers to seek licenses in Malaysia, benefitting both investors and the country’s financial landscape.
OctaFX: a brief overview
OctaFX emerged as an international Forex broker in 2011. It offers seamless access to the financial markets and a wide array of trading options to clients from 180 countries. Augmenting its offering, OctaFX stands as an educational hub, equipping clients with educational tutorials and webinars, articles on Forex trading, and analytical tools.
In 2022, Global Banking and Finance Review named OctaFX the ‘Best Forex Broker Malaysia 2022,’ while International Business Magazine celebrated it as the ‘Best Global Broker Asia 2022.’