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Comment for Proposed Rule 75 FR 3281

  • From: Francesco Consoli
    Organization(s):

    Comment No: 1633
    Date: 1/21/2010

    Comment Text:

    i0-001
    COMMENT
    CL-01633
    From:
    Sent:
    To:
    Cc:
    Subject:
    Francesco Consoli
    Thursday, January 21, 2010 8:51 AM
    secretary
    Stawick, David ; Smith, Thomas J.
    ; Bauer, Jennifer ; Penner, William
    ; Cummings, Christopher W.
    ; Sanchez, Peter
    STRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF
    RETAIL FOREX PROPOSAL RIN 3038-AC61
    Attn
    ¯
    David Stawick, Secretary,
    CFTC
    and ALL CFTC policymakers:
    As a non-affiliated US-based Retail FX trader, please note for the
    record that I am STRONGLY OPPOSED to the 10-1 leverage limit as proposed
    in RIN 3038-AC61 relating to the Regulation of Retail Forex.
    Counter-productive effects
    This senseless limit would in NO way protect, aid or benefit me but
    rather would greatly harm me since this restriction, if passed,
    ¯ would require that I submit substantially more margin-funds into
    non-protected, non-FDIC insured, non-SIPC eligible accounts, actually
    exposing me to increased risk in the event of bankruptcy of my Forex Broker.
    ¯ would NOT divert my business into regulated-Futures trading (as the
    CFTC is probably hoping), but rather would cause me to seek an
    unreliable, higher-risk offshore FX broker to trade through, whose
    practices might be questionable.
    ¯ would eliminate one of the greatest benefits of trading Forex : My
    ability to efficiently deploy my own trading capital in the way that I
    choose.
    Lower FX vols require far greater leverage
    FX volatilities are generally substantially lower than in the Equities
    or Futures market. Therefore, significantly more leverage is required
    simply to capture equivalent trading opportunities.
    Nanny not needed
    I do not want the CFTC to treat me like a child and dictate how I should
    trade. While 100-1 leverage is available to me - should I choose it - I
    am never forced to use it.
    The bottom line is that OTC Retail Forex trading is NOT Futures trading.
    Please do not try to treat it as such!i0-001
    COMMENT
    CL-01633
    PLEASE IMMEDIATELY STRIKE YOUR PROPOSED 10-1 LEVERAGE LIMITATIONS.
    Don't let proposal RIN 3038-AC61 become an expensive lesson in
    unintended consequences ....
    Thank you.