Comment Text:
10-002
COMMENT
CL-07856
From:
Sent:
To:
Subject:
hart tamunotonye
Wednesday, March 10, 2010 10:00 AM
secretary
Regulation of retail Forex
sir,
i wish to
leverage.
comment that the regulation should be at100-1
I=rom: "Alpari (US), LLC"
To:
[email protected] k
Sent:
Mon, 8 March, 2010 12:34:56
Subject:
CFTC Propsal - 3 weeks left for comments
Dear Traders,
We are sending you this follow up email to remind you that you have a voice and there are
only three
weeks left!
The CFTC is accepting comments on it's proposal until March 22, 2010. We strongly
encourage you to submit your comments to them during this time period. Below you can find the
response of Alpari (US) in regards to the new CFTC proposed regulations.
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Alpari Logo
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Contact us
Alpari (US) Speaks out about the CFTC Proposal
New CFTC Proposed Rule
On January 13, 2010, The Commodity Futures Trading Commission (CFTC) released a
public proposal,
Re~]ulation of Off-Exchan~]e Retail Forei~]n Exchan~]e Transactions
and Intermediaries,
which imposes new requirements on the U.S. Forex industry.
The proposal significantly changes the leverage permitted on certain accounts and, if
passed, would have a drastic effect on retail investors. In the CFTC proposed
regulation, leverage in retail forex customer accounts would be subject to a lO-tO-1
limitation.
Currently, the CFTC enforces loo:1 leverage (a 1% margin requirement) to open and
maintain a position on a forex transaction. With the lo:1 leverage proposed, retail
traders would be subject to a lo% margin requirement. Retail traders would have to
invest significantly more to place trades of the same size, ultimately resulting in a
decreased return or loss on invested margin.* The risk-reward ratio that is so
appealing to the average investor today under loo:1 leverage would no longer be
available if the proposal is passed.10-002
COMMENT
CL-07856
The effect of this change can be summarized through the following example:
Currency
Price
Transaction
Current Margin
Proposed Margin
Pair
Quote
Size
Requirement at
Requirement at
1OO:1
Leverage
10:1
Leverage
EUR/USD
1.4285
i standard lot =
$1,428.5o
$14,285.oo
1OO,OOO
GBP/USD
1.637o
i standard lot =
$1,637.oo
$16,37o.oo
1OO,OOO
Where we stand
Alpari (US) has always been a strong supporter of ethical and fair business practices
and the protections offered to traders through industry regulation. However, Alpari
(US) does not support
this
CFTC proposal.
Alpari (US) believes that this proposal discourages beginners from developing and
strengthening their trading style. It effectively prevents investors from evaluating
their own appetite for risk and making personal investing decisions.
We place a strong emphasis on educating traders
to
make informed and responsible
decisions. We believe that, with proper education, it is not necessary for the U.S. Forex
industry to be subject to these regulations. Only recently have the doors opened for
retail investors to trade in this market; these doors are effectively closed through the
proposed rules, once again making the FX market accessible only to financial
institutions.
You have a
voice
Our goal is to guide you in understanding the intentions and ramifications of this
proposal and remind you that, as a retail investor, you have a say in how your
freedoms are controlled. We believe that this is a decision to be made by the traders,
not the regulators. You are the largest group who can make these ramifications
heard.
We encourage you
to
send your comments
to
the CFTC during the 6o day period,
ending on March ~,~,, ~,olo. If you have an opinion on whether the CFTC should
restrict leverage across the board to lO to 1, we want you to voice it. Send your
comments to
[email protected] and include []
Regulation of Retail Forex[]
as
the subject line of the message. Additionally, you can file comments
online,
by fax
at ~,o~,-418-55~,~ or by mail to:
Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 2o581
Team of Alpari (US)
14 Wall Street Suite 5H
New York, NY 1ooo510-002
COMMENT
CL-07856
Tel: 646.825.5760
Fax: 646.825.5761
www.alpari-us.com
NFA ID: o379678
~The potential of profit is equal to the risk of loss on all leveraged transactions.
Risk Warning:
Trading foreign exchange, commodity futures, options, precious
metals and other over-the-counter products carries a high level of risk and may not be
suitable for all investors. The high degree of leverage associated with such trading can
result in substantial losses, as well as gains. The past performance of any trading
strategy or methodology is not indicative of future results, which can vary due to
market volatility; it should not be interpreted as a forecast of future performance. You
should carefully consider whether such trading is suitable for you in light of your
financial condition, level of experience and appetite for risk, and seek advice from an
independent financial advisor, if you have any doubts. Mpari (US), LLC is registered
with the CFTC as a Futures Commission Merchant and is a member of the NFA -
Member ID: o379678.
Confidentiality:
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intended solely for use of the recipient(s). Any review, retransmission, dissemination,
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entities other than intended recipient(s) is prohibited. If you have received this e-mail
in error, please notify the sender immediately, and destroy the material whether
stored on a computer or otherwise.
Phone: 1-646-825-5760
Email: [email protected]
Web: www.alpari-us.com
14 Wall St., Suite 5H, New York, NY 10005
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