Importance of Regulation for Institutional Trading
When it comes to the institutional trading, local central banks loosely control the currency markets. There's no single global regulator present for policing the worldwide forex market. However, the require of a regulator for the institutional forex market cannot be ruled out altogether and You will find some factors behind that as well:

Systemic importance of the big Banks

Till this date, the forex trading losses for a few of the biggest corporations and economic institutions usually are not officially released. Even for trades with such large scales, There is always a possibility that on wrong currency bets, losses worth billion money will happen. It's a fact that currency trading is a zero sum game: however, if a large bank incurs big losses, the same is expected to have a ripple effect on the global economy as well, mainly simply because of the symmetric importance of the same.

Higher Hedging Costs

If the speculation gets to an excessive level, the currency volatility in forex trading will probably be increased as well. Such issues lead to higher expenses incurred by the corporations and as well the other commercial players as well, mainly since of hedging currency risk.

Undue Enrichment of a couple of folks in the expense of Million Others

If a currency moves in an exaggerated or unjustified way, the same generally has an adverse impact on the overall economy of the nation, apart from currency markets. a couple of of these moves could be justified by the underlying financial fundamentals in a few instances. However, for numerous other cases, the temporary weakness in a currency can easily be exploited by the speculators, that too pretty ruthlessly. This sends the currency into a free-fall, just for self-fulfilling prophecy. Such incidents often trigger capital flight along with a prolonged recession as well. This really is precipitated by sharply higher interest rates for defending the currency. On the last 2 decades, this situation has played out in multiple occasions and as an example, you can take the collapse that Baht, the key currency of Thailand skilled in July, 1997. A subsequent crisis all over the Asian region followed as well. The currency speculators were able to exploit the circumstance and make profits worth millions. However, many other folks inside the affected nations suffered.

Major currency traders may oppose the thought of regulation for the institutional trading program for their own positive aspects and proper functioning. However, for the sake of overall transparency, It's required and hence the importance cannot be ruled out altogether.