Importance of Regulation for Institutional Trading
When it comes to the institutional trading, local central banks loosely control the currency markets. There is 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 some factors behind that as well:

Systemic importance of the massive Banks

Till this date, the forex trading losses for some of the biggest corporations and monetary institutions aren't officially released. Even for trades with such big scales, There is certainly often a possibility that on wrong currency bets, losses worth billion cash will happen. It is a reality that currency trading can be a zero sum game: however, if a massive bank incurs large losses, the same is expected to have a ripple effect on the global economy as well, mainly since 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 most likely be increased as well. Such issues lead to higher expenses incurred by the corporations as well as the other commercial players as well, mainly since of hedging currency risk.

Undue Enrichment of several people at the cost 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 few of these moves can 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 as well pretty ruthlessly. This sends the currency into a free-fall, just for self-fulfilling prophecy. Such incidents frequently trigger capital flight and a prolonged recession as well. This extremely is precipitated by sharply higher interest rates for defending the currency. On the last 2 decades, this circumstance has played out in numerous occasions and as an example, it is possible to take the collapse that Baht, the significant currency of Thailand skilled in July, 1997. A next crisis all over the Asian area followed as well. The currency speculators were able to exploit the situation and make profits worth millions. However, many other people within the affected nations suffered.

Major currency traders might oppose the concept of regulation for the institutional trading method for their really own advantages and proper functioning. However, for the sake of overall transparency, It's required and hence the significance cannot be ruled out altogether.