Comment Text:
i0-001
COMMENT
CL-03527
From:
Sent:
To:
Subject:
Nick Meyer
Sunday, January 24, 2010 1:13 PM
secretary
Regulation of Retail Forex
Attn : 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. This proposed 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 volumes require far greater leverage. FX volatilities are generally much lower than in the
Equities or Futures market. Therefore, significantly more leverage is required simply to capture
equivalent trading opportunities. I do not want the CFTC to 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!
I URGE YOU TO IMMEDIATELY STRIKE YOUR PROPOSED 10-1 LEVERAGE LIMITATIONS.
Don't let proposal RIN 3038-AC61 become an expensive lesson in unintended consequences ....
Thank
you
