Comment Text:
10-002
COMMENT
CL-07836
From:
Sent:
To:
Subject:
Leon Bronfin
Wednesday, March 10, 2010 11:34 AM
secretary
FW: OBJECTION TO 10-1 LEVERAGE LIMIT - OR CHANGE FROM EXISTING
LEVERAGE LIMIT - IN REGULATION OF RETAIL FOREX PROPOSAL RIN 3038-
AC61
From: Leon Bronfin [mailto:[email protected]]
Sent:
Wednesday, March 10, 2010 8:27 AM
To: '[email protected]'
C¢:
'[email protected]'; '[email protected]'; '[email protected]'; '[email protected]'; '[email protected]';
'[email protected]'
Subject:
OBJECTION TO 10-1 LEVERAGE LIMIT - OR CHANGE FROM EXISTING LEVERAGE LIMIT - IN REGULATION OF
RETAIL FOREX PROPOSAL RIN 3038-AC61
ATFN: David Stawick, Secretary, CFTC and ALL CFTC Policymakers
As a non-affiliated market participant in the forex market on a retail basis, I am strongly OPPOSED to the 10-1 leverage limit
as proposed in RIN 3038-AC61 to the Regulation of Retail Forex.
Like many attempts to "fix" a problem, adoption of this Regulation will NOT fix the contemplated problem, and in fact, will
make the problem worse and/or create unintended side-effects that will outweigh any positive effects from
implementation.
The proposal would require that I submit substantially more margin funds into non-protected, non-FDIC insured, non-SlPC
eligible accounts, actually exposing me to greater risk in the event of insolvency of my Forex Broker.
This proposal would encourage many retail forex participants like myself to stop or reduce trading, creating loss of business
and therefore jeopardize the business prospects and financial condition of domestic forex brokers - making it riskier for me
to do business with them.
To avoid this risk, I would likely NOT shift my business into regulated Futures trading, because of possible problems with
execution and contango, and instead would leave me with the only alternative of using an off-shore Forex broker - that
may subject me to much greater risks and unknown business practices that may jeopardize my funds.
FX volatilities are generally substantially lower than in the futures market, so significantly more leverage is required to
capture equivalent trading opportunities. By restricting 100-1 leverage - that recently has already been reduced by half-
and which while available to me should I chose to use it, isn't forced on me to use - would greatly and negatively restrict
my activities in this area, reduce market liquidity, expose me to greater risk and unintended consequences - the actual
harm would greatly outweigh any intended benefits.
Please do not adopt this proposed Regulation - it will NOT be beneficial to me, but in fact will be extremely unfriendly and
inhibitive to the retail forex participants.
Thankyou
Leon Bronfin
425-818-9915
[email protected]
800 Bellevue Way NE, S. 400
Bellevue, WA 98004
