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

Systemic significance of the big Banks

Till this date, the forex trading losses for a few of the biggest corporations and monetary institutions aren't officially released. Even for trades with such huge scales, There's always a possibility that on wrong currency bets, losses worth billion dollars will happen. It's a reality that currency trading is actually a zero sum game: however, if a large bank incurs huge 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 likely be increased as well. Such points lead to higher expenses incurred by the corporations as well as the other commercial players as well, mainly because of hedging currency risk.

Undue Enrichment of some individuals in 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 monetary fundamentals in some instances. However, for many 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 often 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 situation has played out in multiple occasions and as an example, it is possible to take the collapse that Baht, the main currency of Thailand skilled in July, 1997. A subsequent crisis all over the Asian area followed as well. The currency speculators were able to exploit the scenario and make profits worth millions. However, many other people within the affected nations suffered.

Major currency traders might 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 significance cannot be ruled out altogether.