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 demand of a regulator for the institutional forex business cannot be ruled out altogether and There are a few factors behind that as well:

Systemic importance of the massive Banks

Till this date, the forex trading losses for several of the biggest corporations and monetary institutions usually are not officially released. Even for trades with such large scales, There is often a possibility that on wrong currency bets, losses worth billion cash will happen. It is a truth that currency trading is a zero sum game: however, if a huge bank incurs massive losses, the same is expected to have a ripple effect on the global economy as well, mainly since of the symmetric significance of the same.

Higher Hedging Costs

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

Undue Enrichment of a couple of men and women at the price 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. several of these moves could be justified by the underlying financial fundamentals in a couple of instances. However, for many other cases, the temporary weakness in a currency can easily be exploited by the speculators, that at the same time pretty ruthlessly. This sends the currency into a free-fall, just for self-fulfilling prophecy. Such incidents typically trigger capital flight along with a prolonged recession as well. This is precipitated by sharply higher interest rates for defending the currency. On the last 2 decades, this scenario has played out in several occasions and as an example, you are able to take the collapse that Baht, the major 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, several other individuals inside the affected nations suffered.

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