The Securities and Exchange Commission (SEC) has issued a warning against engaging in the retail sale and purchase of foreign exchange (forex) online as it may be subject to abuse.

SEC noted that its attention has been drawn to increased advertisements in electronic and other media soliciting investors to engage in leveraged online retail forex trading.

In a statement on its website, the regulator however advised that online retail forex trading is currently unregulated and consequently may be subject to abuse.

"Until a framework for regulation of online retail forex trading is developed by the SEC, any person participating or engaged in such investment activity does so at his or her own risk," the SEC said.