Font Size: AAA // Print // Bookmark

Comment for Proposed Rule 75 FR 3281

  • From: Sreechand Boppudi
    Organization(s):

    Comment No: 1013
    Date: 1/20/2010

    Comment Text:

    i0-001
    COMMENT
    CL-01013
    From:
    Sent:
    To:
    Subject:
    sreechand boppudi
    Wednesday, January 20, 2010 3:24 PM
    secretary
    Regulation of Retail Forex
    Dear Secretary Stawick,
    Greetings. I appreciate your efforts to reduce the fraud in retail forex market. However reducing the
    leverage to 10:1 will make the entry barrier high for many ordinary people like me. To make any
    reasonable money one would need to deposit a high amount even to trader a single contract. This will
    keep the market to high net worth individuals/institutions and will deny the small guys an opportunity to
    participate and to make reasonable returns.
    Also one other concern is that in the futures market where most contracts are valued at $50000+, the day
    trading margins offered by many FCMs are $500 per contract. Given this I am failing to understand why
    retail forex market is treated differently. As a trader I can tell you that forex market trends a lot better
    than futures market in general and though it appears volatile it creates a lot more opportunities for
    investors of all personalities.
    A third issue is many UK, Swiss and German banks offer forex trading in a less restrictive environment.
    If this rule were to go through, many retail clients will invest with these dealers outside the US. This will
    wipe out the domestic retails forex industry resulting in hundreds of job losses. I do not think when
    Congress asked to regulate the retail forex market it was their intention to wipe it out altogether. United
    States is a world leader in Financial Industry and keeping this industry going strong is vital for our
    economy.
    Given this I urge you to keep the leverage at a minimum of 100:1 and strengthen your efforts in the
    following areas.
    1) Require as many dealers and IBs to register.
    2) Segregate client accounts from corporate accounts no matter what the size is (EU has this policy in
    place)
    Best regards
    -
    Sreechand Boppudi
    858-206-5854
    Fremont CA 94538