Comment Text:
i0-001
COMMENT
CL-01678
From:
Sent:
To:
Subject:
Dan Davidson
Thursday, January 21, 2010 9:54 AM
secretary
Regulation of Retail Forex
RE: RIN 3038-AC61
Dear Mr. Stawick:
I am an active Retail Forex Trader, trading FX since 2003 and would like to take this opportunity to
comment on the currently proposed Regulation of the US based Retail Forex Market, particularly as it
pertains to the use and availability of leverage.
As an active Trader, I am all for Regulation in regard to safeguards pertaining to Trader Deposits and
fair and transparent pricing from the FDM's and FCM's with whom Retail Clients trade, however, I and
many of my FX trading contemporaries strongly believe that limiting leverage to 10:1 is highly
restrictive and discriminatory against Retail Clients because it severely limits our trading choices. The
proposed limit is therefore NOT in the best interest of the trading public and additionally discriminates
against Forex Dealers operating from the United States, further limiting our choices as Traders. I, along
with my peers, strongly oppose this proposed rule and believe that it works against the open, accessible
Forex Marketplace that we have had the good fortune to participate in.
Furthermore, it is my educated belief that such legislation will be the end of Retail FX Trading in the
USA, as more and more US Firms move to locations outside the Country and most (if not all) small to
medium sized Traders go with them. This is already occurring to some degree because of the recent
FIFO rules and the reduction of allowable leverage to 100:1.
If the CFTC is concerned about Retail Clients and the safety of Deposit Funds then the bulk of any
legislation should be aimed in this area. Decreasing the allowable leverage only serves to either require
that a Trader actually deposit additional funds with their Forex Dealer, cease Trading FX altogether, or
move to an offshore Broker. This is already a growing trend, as most if not all of the US Forex Firms
have opened branches in locations outside the US and many of my Trading contemporaries are moving
their Accounts so as not to be "tied down" with CFTC Regulation and NFA oversight.
It is my belief that the overwhelming majority of Retail FX Market participants feel that the current
100:1 leverage rules are satisfactory in regard to available Margin. Anything less merely limits our
ability to trade as we wish.
Respectfully,
Dan Davidson
58 Indian Hill Road
Freehold, NJ 0 7728
732-665-6806
Dan@FXTradepro.
corn
