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 call for of a regulator for the institutional forex industry cannot be ruled out altogether and You'll find some factors behind that as well:

Systemic importance of the large Banks

Till this date, the forex trading losses for several of the biggest corporations and economic institutions aren't officially released. Even for trades with such huge scales, There is certainly constantly a possibility that on wrong currency bets, losses worth billion cash will happen. It's a reality that currency trading can be a zero sum game: however, if a huge bank incurs big losses, the same is expected to have a ripple effect on the global economy as well, mainly due to the fact of the symmetric importance of the same.

Higher Hedging Costs

If the speculation gets to an excessive level, the currency volatility in forex trading is going to be increased as well. Such issues lead to higher costs incurred by the corporations along with the other commercial players as well, mainly because of hedging currency risk.

Undue Enrichment of several individuals at 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 few of these moves may be justified by the underlying monetary fundamentals in a few instances. However, for multiple 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 typically trigger capital flight as well as 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 are able 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 scenario and make profits worth millions. However, several other people in 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 importance cannot be ruled out altogether.