Forex brokers in Sri Lanka, not a sentence you hear often is it? well, you will be amazed at how much the Sri Lankan population is involved in the forex market. Despite the fact that their country’s currency isn’t really big in the market Forex is considered the most profitable businesses a man can have in the country. The numerous amount of brokers in Sri Lanka are required by law to be licensed and registered by the Central Bank of Sri Lanka (CBS). As with any other country, there are frauds and scams in Sri Lanka that will not appear in the list of CBS regulated Forex brokers, therefore as a smart and experienced trader, you must make sure that your proceedings will be handled by only the most trustworthy brokers you can find.
If you want to be a regulated Sri Lankan Forex broker you have to have a good relationship with the CBS because the financial market in the country is pretty much unilaterally controlled by it. Foreign currency falls under the trusting gaze of the Exchange Control Department (ECD) which is tasked with regulating everything connected to foreign currency exchange. As a trader, it must be in your best interest to be as safe as possible. Therefore when choosing a broker in Sri Lanka make sure they are regulated by the CBS and have absolutely no problem being as transparent as possible.
You might think that Sri Lankan brokers have a good relationship with India and will allow you to deposit in Rupees. However, you will be surprised because nearly every broker is confined to allowing deposits of only the major currencies and Sri Lankan Rupees. The good news is that every single Sri Lankan Forex broker allows their clients to withdraw their profits in USD, EUR, AUD, and GBP, so when it comes to strong and popular currencies you are covered. Also please consider the fact that if you decide to exchange the sum you withdraw to LKR, it will cost you a small fee. You won’t have to worry about customer support, however, because all the good brokers have a 24-hour service for their customers. If you want an easy list of brokers to quickly look into you can see that we have compiled them in the list below.
CySEC, FCA, ASIC
MT4, MT5, WebTrader
cTrader, MT4, MT5
Up to $5000
ASIC, BaFin, FMA, CNMV, FSC, CIMA, RAK
300:1 T&C Apply
Indigo, MT5, Webtrader, MobileTrader IOS/Android
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The ECD has approved more than 50 brokers in Sri Lanka that can offer you services in Forex trading, however, we both know that an approval is not equivalent to quality. Many brokers have offshore bases and operate within Sri Lanka remotely. In the list above you can check Forex brokers in Sri Lanka that have been tested by us. We deem them completely reliable and trustworthy for you to start working with them.
We suggest that you do your own research by visiting the websites of the above-mentioned brokers. Don’t worry we have also prepared for the case of you not having any time on your hands to do hours of reading through terms and agreements. We have created reviews of the brokers you see in the list. We made sure to make them quick and informative.
1949 was the year when the Monetary Act of Sri Lanka came into play and founded the Central Bank of Sri Lanka a year after its activation. The bank has quite an unorthodox hierarchical system. Basically, its CEO is a governor. All the financial and monetary policies in the country are overseen and regulated by it. Just because the bank has way too many responsibilities in the day-to-day financial dealings of the country, it has created a new body called an Exchange Control Department which is helping the bank in regulating every case concerning Forex brokers in Sri Lanka. The bank also needs to perform these duties:
Please don’t get confused about the management of foreign exchange by the bank, because the main body who manages the core functionality of the system is called the Exchange Control Department (ECD) which we have mentioned already. 1953 was the year that the CBS understood the importance of a separate body in regards to foreign exchange, because of the sheer amount of responsibilities that was delegated to it by the government. Therefore under the Exchange Control Act #24, the ECD was established. It has gone through numerous corrections and regulation updates, most notably in 2005 and 2008 when the markets were the most turbulent.
Let’s get obvious out of the way, shall we? you are probably aware that only Sri Lankan regulated brokers are allowed to operate in Sri Lanka. Unfortunately, however, many brokers try to bypass the law and have their own merry go round of illegal trading. Fortunately, however, Sri Lanka has a very good system in place that helps it spot these scammers and ban them from operating on their territory. But please consider the fact that even if the broker is regulated by the ECD it is not mandatory for traders outside the country to use a VPN or some sorts to be able to access them. But please make sure to read up on the Forex laws that come with the country you live in.
In order for a broker in Sri Lanka to be regulated by the ECD and by default CBSL, it needs to fulfill quite a long list of requirements that contain:
If you want to operate freely in the Sri Lankan Forex market, then you will be needing a document called “Certificate of Authorization”. This document can only be obtained from the Director of Domestic Operations of CBSL. Brokers that have already started doing business and haven’t acquired the “Certificate of Authorization” will automatically be classified as illegal unless they apply for the certificate.
The actions of ECD regulated Forex brokers in Sri Lanka are confined to only of that of an agency. It is highly demanded by the regulatory body of Sri Lanka that when the broker is disclosing information or making a report that they use clear terminology and always state conditions on which transactions will be based on. CBSL will have the full mandate when it comes to finding out information it has deemed as suspiciously hidden away. Every broker will need to comply with the regulations that it will accept when receiving the “Certificate of Authorization”.
The ECD has also noted the fact that many Forex brokers in Sri Lanka harder unqualified personnel and were costing their customers money and time. Therefore the rules dictate that every broker will need to hire only the most qualified and competent staff it can find within the country.
Please also note the fact that you will not be able to become the CEO or even a member of a brokerage firm if you have any records of conviction in debt repaying or moral crime. The lack of academic papers also disqualifies any potential candidates for senior positions in the firm. Take into consideration that in the event of your firm failing to give correct information, it will become subject to investigations. In the case of you being guilty, you will be revoked of your title of “Licenced Sri Lankan Forex broker”.
Scamming has been around roughly the same amount of time that humans have been around. It has come a long way and embedded itself in today’s technologically developed world. As in any other country, Sri Lanka demands that you be as vigilant as ever when trading Forex on its market. Reports of Forex scams began to circulate in early 2009. Over the years big corporations have become too big of a target for scammers, therefore they decide to venture out in the sea of untrained and inexperienced traders to hunt. In 2016 the LKR was very fragile, the only way the CBSL was seeing was inflating the currency by themselves. This was probably a gold mine for Forex scammers in Sri Lanka when they would offer high returns in future deals, hoping to fool traders that didn’t know of the inflation plans. This was the reason the IMF actually criticized the CBSL and connected them to the increasing amount of online Forex scams. Fortunately for the traders most of the scammers were warded off by the CBSL and the Sri Lankan Forex market became a place to thrive once again, hopefully, they had learned their lesson, and we’re talking about all of them, the traders, scammers, and CBSL themselves. No matter how under control a web space can be, there will always be a scammer that can squeeze through, so we advise you that you follow the ECD guidelines and stay safe from all the scammers that are out there.
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