Comment Text:
i0-001
COMMENT
CL-01642
From:
Sent:
To:
Cc:
Subject:
Andrew Nakhla
Thursday, January 21, 2010 9:02 AM
secretary
Stawick, David ; Smith, Thomas J. ;
Bauer, Jennifer ; Penner, William ;
Cummings, Christopher W. ; Sanchez, Peter
TRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF RETAIL
FOREX PROPOSAL RIN 3038-AC61
ttn : 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.
Cou nter- prod uctive 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!
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.
