Comment Text:
i0-001
COMMENT
CL-03512
From:
Sent:
To:
Subject:
F M
Sunday, January 24, 2010 12:20 PM
secretary
Regulation of Retail Forex
Have you stopped to think and wonder why the high volume of responses to this proposed rule
compared to prior rule proposal responses? Unlike no hedging and other rules adopted before, lowering
retail forex margin to 10 to 1 will definitely end retail forex in the U.S. Firms and traders will just
transfer account offshore or open new account offshore. Plain and simple. 10 to 1 margin will not allow
traders to margin at 10 to 1 because you have to have leeway for a trade initially going against you and
have a SL.
Movement in price in Forex are in pips, which is .0001 increments. If an account cannot be properly
leveraged the small movements will not produce enough profits to allow people to trade it. Think about
what the fule will accomplish, or not, before passing a rule that will kill U.S. retail forex. FXCM already
has a UK, branch, IBFX is getting approved by the FSA to open offshore account, and the list goes on.
It seems to me that the CFTC has a bias against spot forex and for forex futures. But passing this rule is
not going to force spot traders into fx futures. There is not enough liquitidy there, and people are very
very upset about the government telling them how to trade. Offshore is where they will go for sure.
Not many traders are going to deposit large sums of money in unsecured U.S. forex accounts because if
the broker goes bust, and most will because of this rule, they will lose all their funds. If the CFTC really
wanted to protect U.S. retail traders, then they would follow the FSA and required segregated and
insured accounts, and allow margin as before or as the FSA mandates.
This rule does not protect U. S retail traders but actually will unprotect the ones that stay and have to
fund accounts with high balances in order to trade.
Why do you think that all email responses, as posted to date, oppose this rule? Think this through before
making such a bad decision.
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