Comment Text:
i0-001
COMMENT
CL-05629
From:
Sent:
To:
Subject:
eric
Sunday, February 28, 2010 2:38 PM
secretary
Regulation of Retail Forex - Public Comments
Sir, Madam
I'd like to respectfully bring to your attention
the serious consequences of limitinq leveraqe to 10:1.
I trade
forex for a living to support myself and my wife and children in this difficult economic times for our country (I lost
my job due to the recession in 2008).
I chose to open a trading account with a U.S based forex dealer merchant (FDM) that is a member of the National
~u_t~r~§..~§§~c.!~a_t,i~o~. and is registered with the CFTC as a ~u~t~r~§o~?o~.!§~!.?_n.,.~r~c_~a~t~_(~C,~,)~. I believe that the
funds in my trading account are safe due to the oversight provided by the NFA and the CFTC.
The NFA already
enacted rules in 2009 limiting leverage to 100:1, banninq hedging and imposing FIFO.
Therefore if the
proposal of limiting leverage to 10:1 come to pass it will
be an overkill
and run contrary to the CFTC stated goal
of protecting U.S retail forex traders against unscrupulous retail forex brokers by forcing me and thousands of
fellow U.S based traders to move our trading accounts to Canada,the UK, Switzerland, Dubai and other countries
where there's no limit on leverage but where the regulatory environment is not always on par with what we have in
the
U.S.
The second obvious grave consequence is that this proposed rule will put out of business
American retail forex brokers with the
loss
of directly and indirectly of thousands of good paying
American
jobs.
It will also be a gift to foreign forex retail brokers who have already begun to widely
advertised on the internet that the current and future NFA/CFTC requlations don't apply to them and
are trying to lure more U.S based traders. Is the CFTC willing to accept these dire consequences
when our country is still in a recession with a 10% unemployment rate?
We traders cannot make a living and support our families with only a 10:1 leveraqe limit. This proposed
rule will not "protect" me nor my fellow traders from losing money when trading forex but to the
contrary: it will only hurt my tradinq profits by limitinq my positions size and promptinq marqin calls
sooner,
All the U.S. based Forex brokers - dealers already comply with the NFA disclosures requirements about
the risks involved with forex trading on margin using leverage. It's been my experience with meeting
forex traders at tradinq events and participating in online trading forums that the overwhelming
majority of forex retail traders are sophisticated investors who understand the risks they're taking
when usinq leveraqe.
~_~r~ is more or less risky depending on the strategy. An arbitrary leverage 10: 1, 50: 1,
100:1 etc.. is meaningless unless the trading strategy employed is referred to also.
One size doesn't fit
all.
I
strongly believe that by simply requiring clients of retail forex brokers to take an online competency test to verify
and certify that the particular client understands the true risks involved in using leverage; and depending on his
passing score he gets "qualified" to trade with 100:1 or 50:1 or 10:1 etc..maximum leverage to protect him/her
from himself/herself. If the CFTC is worried about retail forex brokers-dealers "taking advantage" of uninformed
customers/traders trough leverage then certifying the traders should resolve that concern.
Sincerely,
Eric Courtier
780 Third Avenue - Suite 1025
New York -NY- 10017
