In case you are interested if forex trading is legal, then short answer is YES forex is legal.
In this article we will look into the forex legality in specific countries across the globe.
Is Forex Trading Legal ?
Forex trading is completely legal however various countries have established forex regulations that demand strict compliance from both traders and brokers. If you are considering engaging in online forex trading, it is crucial to verify the license of your broker and to investigate the applicable laws in your country of residence.
Some Countries where Forex Trading is Legal
- South Africa: Yes
- Australia: Yes
- USA: Yes
- UK: Yes
- Canada: Yes
- European Union (EEA, EU): Yes
- United Arab Emirates : Yes
- Malaysia: Yes with restrictions
- India: Yes with very strict restrictions
- Philippines : Yes with restrictions
– United States
While Forex is fully legal in the United States, things have been quite difficult for retail traders in this country following the decision of the Commodities Futures Trading Commission to enact harsh rules that affect this activity.
The most prominent of these rules is the one that fully restricts private companies that are not registered with the NFA and CFTC from making any deal with American retail traders. In fact, the United States has a low number of properly regulated brokers, considering the high capital requirement, which is of $20 million.
In the case of China, while Forex trading is entirely legal, Chinesse authorities have imposed strict capital control that prevents local traders from opening accounts with brokers from other countries around the world.
The situation with India is quite particular since retail forex trading is also completely legal in this country but exclusively on registered exchanges, meaning that for Indians, it’s illegal to engage in spot currency trading with international brokers! In fact, this case is so delicate in this country that Indian FX traders are in one of the most disadvantaged situations in comparison with the vast majority of traders around the world.
Unfortunately, something similar to India is currently taking place in Japan, where the nation’s Financial Services Agency FSA only allows local Forex traders to operate through domestically licensed brokers. Of course, it’s fair to say that the Japanese retail FX industry remains one of the most competitive in the world, to the point where it’s currently experiencing a significant boom.
– South Korea
The situation in Japan isn’t exactly the case in South Korea. This is partly because Forex trading in this country has some similarities with the reality that China is experiencing. Here, it’s illegal for all South Koreans to open accounts with brokers from other parts of the world because of the capital controls.
Authorities in Turkey decided to enact different types of regulations that legally prohibit brokers from other parts of the world from working with Turkish retail FX traders.
This makes Forex operations quite difficult in Turkey. This is especially true considering the fact that if a brokerage company wants to operate in the nation’s retail market in a legal manner, it needs to be licensed by Capital Markets Board, which isn’t exactly an easy procedure.
Moreover, it’s worth saying that Turkish traders cope with 1:10 maximum leverage and high minimum deposits when dealing with such brokers.
– European Union
The case of Forex in the European Union isn’t that different from Turkey, considering that the European Securities and Markets Authority decided to enact harsh CFD trading restrictions in every single country that is part of this territory in the year 2018.
What’s even worse is the fact that all regulators across the European Union currently support these restrictions, which are being used as a standard by the United Kingdom’s Financial Conduct Authority.
Which countries have outright banned forex ?
Presently, forex trading is not prohibited in any country. An absolute prohibition on forex trading would hinder global commerce and tourism, which no nation desires to forfeit as a revenue source.
If Forex Legal Where You Live?
Despite the restrictions that these nations are imposing, the Forex trading industry remains strong enough to prevent any kind of massive downfall in the short term. In fact, some of the most important traders currently live in nations that don’t seriously restrict it.
If you want to get into this style of trading, the first thing you should do is to check your country’s laws on Forex trading to know how freely you can operate.
Check out the list of forex regulatory bodies.