Comment Text:
i0-001
COMMENT
CL-03896
From:
Sent:
To:
Subject:
Altis, Inc.
Monday, January 25, 2010 7:51 PM
secretary
Regulation of Retail Forex
Dear Mr. Secretary,
I would like to comment on the proposal to limit leverage on retail forex accounts to ten to one (10:1).
Why is it necessary to continually apply restrictions to retail traders? I moved to Forex when the SEC
decided to restrict day trading by imposing a $25,000 minimum account balance. Without $25k, the
brokerage wouldn't allow day trading and further wouldn't allow the account to be margined. With that
move, short sales became off limits as well.
Enough is enough, let the retail investor with the smallest account have the same privileges as a
commercial trader. If the CFTC wants to impose 10:1 on retail accounts, then apply 10:1 to the
commercial accounts. I can assure you that my trading at 200:1 last year and 100:1 this year did not
contribute to the financial meltdown on Wall Street. It would seem to me that the appropriate place for
leverage curbs to be imposed is on the commercial traders. They are big enough to move the markets,
retail traders do not enjoy the same advantage.
I am really sick and tired of having government determine what level of risk is appropriate for me. If
you were truly concerned for the retail trader, you would institute rules mandating segregated accounts
to avoid a repeat of the REFCO disaster.
The CFTC and SEC should focus on getting a grip on the derivatives and swaps markets before
worrying about off exchange retail trade. But that will never happen because the commercials have the
lobbying power to keep the rules from affecting them. I wish that the same could be said for me and my
retail account brethren.
By the way, make no mistake about it, by crushing the trading margins, all that the commission is doing
is forcing the brokers to moves their operations offshore. As an example, hedging was taken away and
one of the largest forex brokers began offering hedged accounts in the UK before the rule was even
implemented. So, it is ludicrous to think that the business won't move offshore to preserve leverage at
100:1. I will move my account offshore if this rule is allowed to pass and take my chances with the
business conduct of the firm that takes me as a customer.
I'd like to say thanks for looking out for me, but in reality, all that I can say is don't do me any more
favors.
Scott Penley
Stonington, CT
