Comment Text:
i0-001
COMMENT
CL-05594
From:
Sent:
To:
Subject:
Attach:
Giovanni La Scala
Friday, February 26, 2010 12:34 AM
secretary
Regulation of Retail Forex
Regulation-of- Retail- Forex- RIN-3038-AC61-Comment-GIB. pdf
Dear Mr. Stawick,
Please refer to the attached comment letter on the Regulation of Retail Forex RIN 3038-AC61, thank you.
Kind regards,
Giovanni La Scala
FastBrokers.corn
[email protected]
Web: www.fastbrokers.com
Telephone: 818.545.9955
Toll free: 888.791.FAST
Fax: 818.545.9997
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FastBrokers.com is a division of Fast Trading Services, LLC. Member NFA - National Futures Association (ID# 0342002) and registered Independent
Introducing Broker with CFTC - Commodity Futures Trading Commission.
Risk Disclosure:There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before
opening an account as these financial instruments are not appropriate for all investors.
Copyright © 2004-2007 Fast Trading Services, LLC - All Rights Reserved.1V~. David
Stawick, Secretary
Comm odity
Future
s Trading Corn m[
ssi on
1155 21
~t
Street N.W
Wasl',ington, :1:) C 20581
lZE: Comm ents on the proposed Regulation 0f Of~-Exchange lZetmml Foreign Exchange Transactions
and Interm edime s RIle 3038,AC61 C, Proposal:r),
Febru a_ry, 25t~ 20 i0
ear -Mr: Stawick;
The following c omments are submitted on behalf of'Fast Trading Services, LLC Nb/a
:FastBr0kers. corn, dr, Independent Introducing Broker CI~,")registered with
:~A
and @TC.
Proposed rules commented:
The forthcoming proposed rules regarding the regulation of' off-Exchar, ge retail Forex trading
contains, arr, ong the most discussed policies, a number of proposals which directly affect the
registrant category of" ]33s (Intro&cing Brokers). The proposal often remarks the CFTC's view to
create a unique link of" compli~ce responsibility between the ]73 ~d the FCIVFJ:P, FED who is
carrying the account introduced
1
.
Furthermore, it is planned to require ~ ]~ that introduces retail
:Forex transaction to a RFE]) or an FC.~, to be guaranteed by such R_FED or :F,~V£
2.
For this purpose
a new Part C guarantee agreement to f'orm 1-:F1Z-1£ (definition of such guarantee) will be issued to
regulate l~s guaranteed by lZF:EDs3 Finally, to con[irm the similarity of this new category to the
existing 1-FR.-]]3 part B, retail Forex :I:Bs would not be subject to a capital reqmrement; rather, they
would have to operate pursuant to a guarantee agreement.
4
And that"
ICFTC RIN 303g;AC~ ipage #
~CFTC RIN 303S~AC61 page#
~ CFTC RIN 303g-AC~i page ~i
4 CFTC RIN 303g'AC~I pag~ 4~
s CFTC RIN 303g~AC~I
1 of 4
500 N, Brand Bird,, SLJte 1950, Glendale; CA 91~m -Phsne: 81&54&9955- Fax: 818,~5,9997 - e:mail: in~fastbrd~ite iris cl ear what the new ompliance requirem ents for the above mentioned categorieS will be
it is not men~oned how such changes will Afect new mid eedstia~ ]:Bs be!onging inthe catego .ry of
Ii',dependent (IIB), which due to their registration status, are already authorized to operate under
multiple clearing agreemer, ts with different FCMs and/or FDMs. As the proposal introduces
innovative principles for Forex IBs, in which the Guarantee and a unique counterpar~y are
.Vss qua raora" to
legally solicit retail F0rex inVest0rs~ these condiaons evidently collide with the
existing nature of the Independent ]23 and creates incongruity ~th the san',e applied to the Futures
IBs~ lXas~ Trading Set'dcesl respectfully asks the Commission ~o review and lmfy the proposed
rules on shis regard.
12 omm ent 2
Hypothetically, if the Guarar, teed I]3 proposal will be approved without addressing the rules for IIBs,
many existing Independent iBs, like this company, in order to maintain compliance with the new
rules, will find themselves forced to choose whether to downsize to a guaranteed IB in order to
maintain the retail Forex operat, ons or to completely ban the forex product in order to save their II2,
status.
This drarr, atic choice will also cause Igs to force the tmmination of their existing relations
resulting in a loss of customers and income. Ironically, it is further interesting to consider the
compliance scenar:o in case an IIB maintains relationships with multiple ~FCMs offering, among
futures and options, also retai! Forex
Eased on the latest report of~Futures Induslry Registrants as of October !, 2009
g,
there is a total of
578 IIY3s registered firms, several of which are offering retail Forex. If the proposal will be approved
without addressing the I~ unique needs, it could cause a great economic damage to many Ills and
it wilt force them to choose which option will damage thern the least.
Fast
Trading Services
respectfully asks the
Commission
to reconsider such proposal in order to allow IIBs to maintain
multiple clearing partners including FCMs and RFEDs, and not to limit their business activities by
forcing them to enter into a guaranteed agreement to solicit off-exchange retail Forex.
2 of 4
500 N, Brand Bird,, Sdte 1950, Glendale; CA 91~m -Phsne: 81&54&9955- Fax: 818,~5,g~:J97 ~;e:mail: in~fastbrdFast Trading Services, LLC welcomes any role which would improve customer protection
I-:owevero this comply respec~ully dis~rees v:th the mew of ~he Commission on what it is s~a~ed
as ~he m~n reason ~at. should m~e necess~ IBs solici~i~ ret~l ~orex ~o enter into a £u~an~eed
~reement. The Commission cle~ly justified the measure
~
~ ~ "as to d~, ~os~ p~rso~s who l~aw
i~o~c~d o~xcha~g~ r~tai] ~r~x c~s~o~r~ ~ co~ar¢i~s ~a~ ~o~ be~t~ r~q~ir~d ~ r~s~r
as I~s, a~d fraud~t~t sol~cita~o~ a~d sat~s prac~c~s ~a~ b~ a
commonplace.
'~
As the proposN
will in~oduce m~dato~ regis~afion requirement for each solicitor and fi~, it would be
consequently subject to compli~ce ~d aunts from its designed futures associa~on, At this point, ~t
is not cle~ why off-exchange ret~l forex ~ regtstr~ts should be guar~teed, while it could be
given the op~on to register as ~ ~ or as aG~, at ~e ~'s ~scre~on like forFu~res sdicit~s. As
the Commission is aw~e, KBs ~e subject to higher compliance responsibilities ~d capitN
requirements due to ~e nature of the registration itself; there is no need to limit the registration
choice due to the business nature of registered ~s. Fur~ermore, imposing a gun.tee aNeement to
the FCg~'R~ZD, will increase consistently the worNoad of the compli~ce officers of the
FC~FE~; it will oNigate the remotely located FCM to visit ~d aunt regul~ly Ne
GIE.
approve
eac~ sales document, marketing matenN, etc.. ~is enormous worNoad will m~e ~e FCND'~E~
not more responsible but simply more reluct~t to accept new G~s, ~d to select a few G~s only
~ong ~e most successN1 ones, m~ng it h~der for t~e smaller fi~s to f~rly grow their business,
C omment 4
Fast Trading SetwiC es, LLC has been an ZN-FA member and registered with the
CFTC
since incepti0n.
This company has been soliciting both 1Sutures and Retail :Forex attracting customers from 70
Countries. We belier e the reason which has made us attracti::e to Our custorners, as opposed to open
directly through the FCMs, has been the capability to select the best counterparts and maintain a
range Of offers to s ati sly the unique need of each investor. Removing this possibility by forcing
~ to become guaranteed, investors ~11 find the Categor] Of IB and their services practicNly
wo~less, and ]-£'s success will depend directly on the !;ClVr_!P.FED fortune: Many investors have
? CFTC P,_IN 303g,A.C61 pag
e
20,27
8 CFTC
RIN
303g~AC61 page 20
3 of 4
500 N, Brand Bird,, Sdte 1950, Glendale; CA 91~m -Phsne: 81&54&9955- Fax: 818,~5,g~:J97 ~;e:mail: in~fastbrdintroduce to, rather than being forced to sell a single product good or bad it is. There is no risk for
investc~-s by leaving this option to the :fiB. Again, IIS are already requital t.o set higher standards of
compliance compared to GIB, maintain and designate their set of" compliance rules, review and
supervise theft" sales tearn, maintaining net capital As any other cabsgory, IIBs are also mbject to
regular audits by the NFA. Under a risk point, of view, Fast Trading Services believes that. the
rule wi!l not provide any benefit, to the industry, and it will neither create additional protection to the
retail forsx trader. Fast Trading Service, LLC respectfully asks the C~lsslcn to review the
proposed rules in this rnat~er.
Sincere!y,
®iusepp e Zagara
Managing Par~.er &Founder
Giova~i La Scala
Managing Partner & Founder
4 of"4
500 N; Brand Bird, ~ite ig50- Glendale CA 91203- Phone: 8i81545;9955 "Fax: 8t8;545;9~7 - e-mail: nfo@fa~rokers,com
