Is OctaFX A Scam Broker? Everything You Need To Know About OctaFX In Malaysia

Bank Negara Malaysia (BNM) added OctaFX to the Financial Consumer Alert List (FCA) along with several other brokers. Here’s what it means for traders.

Last year, OctaFX, as well as most Forex brokers working in Malaysia, ended up in the Financial Consumer Alert List (FCA) of Bank Negara Malaysia (BNM) and the Investor Alert List of the Securities Commission Malaysia (SC).

How Did OctaFX (And Other Brokers) Get Into The Alert Lists?

OctaFX in the Bank Negara Malaysia investor alert list

Both BNM and SC state that their alert lists serve as guides for the public to increase awareness of entities that are not licensed or regulated by the institutions. However, it does not indicate that the entity is a scam or a fraud – rather, it simply does not possess the local license.

Just like OctaFX, other international brokers, such as XM and Exness, are also included in the lists. All three of them possess licenses in other countries. FSCA licenses OctaFX in South Africa and CySEC in Cyprus, XM has a CySEC license and an Australian ASIC license, while Exness has multiple licenses ranging from the FCA in the UK to the FSCA in South Africa. However, none of them are licensed by the Securities Commission or Bank Negara.

XM and Exness in the BNM Financial Consumer Alert List

Interestingly, there are no Forex brokers that are licensed in Malaysia. The Securities Commission is the sole licensing authority for entities wishing to deal in securities and derivatives in Malaysia. However, the only online broker that has got SC’s capital markets services license (CMSL) is the securities-dealing Rakuten, a joint venture between Malaysia’s investment bank Kenanga Investment Bank Berhad and Japan’s Rakuten Securities. Other online brokers, as well as other investment options—such as derivative CFD and Forex trading—remain unacknowledged by the Securities Commission. 

According to SC Public Register, there are only 16 companies licensed for dealing in derivatives—most of them large banks that usually do not provide brokerage services—and none of them are actual online CFD brokers. This extremely low number suggests Malaysian investors simply lack opportunities and options for investing in the international financial markets. Nevertheless, The Securities Commission and Bank Negara are quick to add international brokers to their alert lists. The absence of a licence, however, only affects certain advertising aspects of the brokers’ work, as they can still legally accept clients from Malaysia.

Why Do Brokers Choose To Stay International?

Because that way, they believe they can provide better trading conditions and stay on top of the competition. The regulatory restrictions and limitations imposed by local financial authorities can often be very constraining in terms of the variety of investment instruments, trading conditions and bonus programs a broker may provide. This often results in clients turning to brokers with a more diverse range of instruments, better conditions, a copy trading service and appealing promotional offers. Those are most usually international brokers providing Forex trading services.

So, even if Forex brokers could get licensed in Malaysia, they may not hurry to do so because it could severely worsen the trading conditions they provide and lose the competition to international brokers. 

Securities Commission Malaysia, the regulatory authority for financial services providers

What About Wak Doyok, Fizo Omar, And Aliff Syukri Promoting OctaFX?

Evidently, OctaFX has stopped working with all of those celebrities, as there haven’t been any new promotional activities with them for quite a long time now. As for now, no new Malaysian influencers are working with the broker. It is unclear if it’s illegal for OctaFX to work with them only because it is included in the alert lists.

Wak Doyok and Fizo Omar in OctaFX’s promotional campaign

Is OctaFX Still Operating In Malaysia?

Yes, OctaFX is still operating in Malaysia. As an international broker, it can accept clients from most jurisdictions worldwide, which is proved by the fact that OctaFX has clients in more than 180 countries. 

However, when it comes to Forex trading itself, it’s extremely important to acquire sufficient knowledge of the financial markets and use risk management techniques when trading. Without that, you are facing great risks of losing your money with any broker you choose to trade with. So ensure you are fully prepared before depositing your funds and starting investing or trading in the financial domain.

This contains sponsored content and is for informational purposes only and not intended to be investing advice.