Most of the countries in this series require you to infer the position from a statute and a licensing schedule. Bangladesh and Sri Lanka do not. Both central banks have issued public communications stating that residents are not permitted to engage in leveraged foreign exchange trading through electronic or online platforms with foreign counterparties. The mechanism is exchange control law, and the notices exist because the activity was already widespread.
A founder can therefore skip a great deal of analysis. The question is not whether a licence category exists. The question is whether you want to build a business that depends on residents breaking their own country's foreign exchange rules to fund it.
Bangladesh: the 1947 Act still does the work
Bangladesh Bank administers the Foreign Exchange Regulation Act 1947, and the taka is not convertible for capital account purposes. Outward remittance by residents is permitted for defined purposes through authorised dealers, with documentation and, for many categories, prior approval. Bangladesh Bank has issued repeated public cautions against online foreign exchange trading and against the operators soliciting residents into it.
The Bangladesh Securities and Exchange Commission supervises the securities market, the two exchanges, listed issuers, brokers, merchant banks and collective schemes. Its remit is domestic securities activity. It is not the regulator that decides whether a resident may fund an offshore margin account, and pointing at the absence of a CFD prohibition in securities law misses where the prohibition actually lives.
Enforcement attention in Bangladesh has focused on informal transfer networks, the hundi system among them, because that is how money leaves when the authorised route is closed. For a firm receiving those funds, the consequence is a deposit with no verifiable origin and a withdrawal that cannot be sent back the way it came. Our guide to wire recalls describes what happens when a sending institution later disputes a transfer, and third party origin is the scenario where it hurts most.
Sri Lanka: the Foreign Exchange Act and a rebuilt regime
Sri Lanka's exchange control framework sits in the Foreign Exchange Act No. 12 of 2017, administered by the Central Bank of Sri Lanka, which has issued public notices stating that residents are not permitted to engage in leveraged foreign exchange trading through electronic platforms and cautioning against the schemes marketing it. The Central Bank has issued similar cautions about virtual currency schemes.
The Securities and Exchange Commission of Sri Lanka supervises the Colombo exchange, listed companies, stockbrokers, unit trusts and market intermediaries. As in Bangladesh, that is a domestic securities perimeter rather than a route to authorise leveraged over the counter products for residents.
Sri Lanka's recent experience with external financing has made its exchange control administration stricter rather than looser, and outbound flows for non essential purposes attract close attention from authorised dealers. A firm planning around an assumption that enforcement is relaxed is planning around the wrong decade.
This article is descriptive general information, not legal advice. Rules and public notices change. Any firm dealing with Bangladeshi or Sri Lankan residents must take its own qualified legal advice in the country concerned before it markets, onboards or takes a payment. Leveraged trading carries a high risk of loss.
What this means at each decision point
Correspondent banks apply country risk ratings that account for external position, sanctions exposure and monitoring status, and both countries have been through periods that keep those ratings elevated. The result is enhanced diligence on individual transfers, slower settlement and reluctance to open new relationships in adjacent sectors, which is the practical shape of de-risking.
Card acquirers see the same combination as elsewhere: a high risk merchant category for leveraged trading, cross border issuance from restricted currency markets, elevated declines and disputes. The corridor economics are poor before the compliance question arrives.
Local payment providers are supervised by the respective central banks and follow their acceptance policies. There is no version of this where a domestic aggregator knowingly settles trading deposits offshore, and the versions where it happens unknowingly end in a frozen balance at the first review.
Liquidity providers, platform vendors and advertising platforms each run their own know your business or policy checks. Where a policy requires evidence of authorisation in the countries targeted, a firm with none cannot satisfy it, and workarounds through unbranded funnels build an enforcement record rather than a channel.
The legitimate version of this market
There is real demand in both countries, and it does not follow that no business exists. Two honest routes are available.
The first is domestic. Build inside the securities perimeter, licensed by the local commission, offering what the domestic rulebook permits. Narrower product, real client protection, a bank that will hold your account.
The second is the diaspora. Bangladeshi and Sri Lankan nationals working in the Gulf, in Malaysia, in the United Kingdom, in Italy and in Canada are resident where they work and governed by those rules. Serving them means licensing where they are and marketing in their language. It is a genuine and substantial market, and it is one that survives due diligence.
What does not work is an offshore entity, an affiliate network, and deposits arriving through channels nobody wants to describe in writing. SINGUARD sells software, so we have no stake in which licence you obtain, and that is exactly why the advice is blunt: sort the licensing and the banking first, then choose the platform. Our comparison of offshore broker licences covers what the paperwork does and does not buy, and the answer in South Asia is less than founders hope.
"When a central bank puts out a notice naming the activity, you have your answer. Everything after that is a founder trying to argue with a document that is not going to change its mind."
— Roman Onta, Executive Director, SINGUARD
Key Takeaways
- Both central banks have published notices stating that residents may not trade leveraged foreign exchange through online platforms with foreign counterparties.
- Bangladesh Bank works from the Foreign Exchange Regulation Act 1947 and Sri Lanka from the Foreign Exchange Act No. 12 of 2017; the securities commissions supervise domestic markets, not this question.
- Closed authorised routes push funding through informal networks, leaving the receiving firm with deposits it cannot evidence and withdrawals it cannot return.
- The addressable market that survives due diligence is domestic licensing or the diaspora, served where those clients actually live.
Frequently Asked Questions
Is online forex trading allowed in Bangladesh?
Bangladesh Bank administers the Foreign Exchange Regulation Act 1947 and has issued public cautions stating that residents are not permitted to engage in online foreign exchange trading with foreign platforms. The taka is not convertible for capital account purposes and outward remittance is limited to defined purposes through authorised dealers. Individuals should take their own legal advice.
What has the Central Bank of Sri Lanka said about leveraged trading?
The Central Bank has issued public notices under the Foreign Exchange Act No. 12 of 2017 stating that residents are not permitted to engage in leveraged foreign exchange trading through electronic trading platforms, and has cautioned separately about virtual currency schemes. Exchange control administration has tightened rather than relaxed in recent years.
Can I serve Bangladeshi or Sri Lankan clients from an offshore licence?
An offshore registration authorises nothing in either country, and the underlying funding of the account would breach the exchange control regime the client is subject to. The route that survives diligence is licensing domestically for domestic clients, or licensing where diaspora clients actually reside and serving them there.
About the Author
Roman Onta is an Executive Director at SINGUARD. He builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals side by side with his brother Alex Onta, and he helped on the design of eTrader, the division Alex built and leads. His ground is worldwide payment processing, AML compliance and the corporate structures brokers are built on, work the two of them carry together, shaped by executive roles in the UAE and international corporates. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.