Comment Text:
i0-001
COMMENT
CL-03795
From:
Sent:
To:
Subject:
WF G
Monday, January 25, 2010 2:16 PM
secretary
RE: Comments on Proposed FX Regs.
Atttention CFTC:
Re: Commmentary on proposed CFTC regs on Forex--as requested
As part of the proposed regulations, it is stated." "leverage in retail forex
customer accounts wouM be subject to a l O-to-1 fimitation, "which means 10:1
leverage wouM be the maximum amount allowed for all Forex traders in the U.S.
This will mean that to trade a single standard lot of $100,000 one wouldl need $10,000 in your
account. Currently it can be as little as $1000 (100:1) in the U.S. and $250 in the U.K. (400:1)!
How does this "help" U.S. retail traders or the FX Industry in U.S.??
The government is suppose to be helping the retail Forex trader by providing a safe
environment via regulations--that is, safe from fraud and unfair practices--NOT safe
from risk in the market. The Risk in the market is what makes profits possible for
investors, hedging of risk available for those who have currency risks in their
business, and provides liquidity in this public market.
Reducing the leverage to
10:1
will reduce not only the risk but the profit opportunity for the retail trader and increase
the hedging cost for hedgers of currency risk.
This does not serve the public--rather
damages the FX Trader by reducing his profit opportunity- - and increases the cost of
hedgeing risk -- thus weakening the economy even more than it is. WHERE IS THE
BENEFIT? TO WHOM?
In addition, the proposed regs will drive more FX business to off-shore brokers--which
has already begun due to recent regs passed that were also damaging to the retail
trader's profit potential in Forex. This will also have a negative impact on U.S.
employment in the industry due to more investors rushing to offshore brokers.
Some regulation to keep out the scams is justifiable. But TOO MUCH regulation is
damaging to the benefits of a "free Market" and the public on both sides--invetors and
hedgers-- who can benefit therefrom.
In my opinion and virtually ALL of those in the industry with whom I have spoken,
THESE PROPOSED REGS ARE TOO MUCH AND DAMAGE THE FREE MARKET AND
ITS BENEFITS TO INVESTORS, HEDGERS AND THE ECONOMY!
Yours truly,
Charles R. Rietz, FX Trader
Gilbert, AZ
