BNM WARNS SGX ABOUT OFFSHORE RINGGIT TRADE
Stephen Innes, Head of Trading, Asia-Pacific at OANDA, Singapore
Bank Negara Malaysia has slammed the move to introduce ringgit futures on the Singapore Stock Exchange, saying it goes against Malaysia’s foreign exchange policy and rules. Stephen Innes, Head of Trading in Asia-Pacific at OANDA in Singapore weighs in on the issue.
BNM Stance on Ringgit Currency Derivatives Products in Offshore Market
The recent introduction of the ringgit futures at the Singapore Exchange (SGX) and the Intercontinental Exchange (ICE) or ICE Futures Singapore is inconsistent with Malaysia’s foreign exchange administration (FEA) policy and rules.
The Malaysian ringgit is a non-internationalised currency and thus, offshore trading of ringgit, in any form whether as a non-deliverable forward traded out of offshore financial centres or as a futures, options and other derivative contracts on exchanges outside of Malaysia, is against Malaysia’s policy.
Bank Negara Malaysia (BNM) would like to remind all market participants to observe the existing FEA rules. Contravention of the FEA is an offence under the Financial Services Act 2013 and Islamic Financial Services Act 2013. Appropriate action under the law will be taken against any person who does not comply with prevailing rules and regulations. Foreign participants should access the onshore ringgit foreign exchange market to meet their financial needs, either directly with onshore licensed financial institutions or their Appointed Overseas Office (AOO).