Comment Text:
i0-001
COMMENT
CL-06301
From:
Sent:
To:
Subject:
Jim Stengel
Friday, March 5, 2010 6:22 PM
secretary
Regulation of Retail Forex
Dear David Stawick, Secretary Commodity Futures Trading Commission:
Please be advised that this is written with regard to RIN 3038-AC61. I am not sure of the intent of this
proposed regulation change, but it has long reaching negative implications for the viability of the
currency market as well as the retail trader. The unintended consequences of this proposal could be
disastrous for our already fragile economy.
I believe the proposed reduction in maximum leverage from 100:1 to 10:1 is ill advised and counter
productive to retail participants and the market as a whole.
Lowering leverage minimizes profit potential and increases capital requirements to participate in this
market. This discourages small entrepreneurs thus providing less liquidity to the forex market which
will likely increase volatility. I assume the CFTC is interested in stabilizing currencies to promote
international trade. Taking market participants out of FOREX is not the way to accomplish this goal.
Some of the retail business will probably migrate from United States brokers to international providers
with the obvious negative impact to domestic FOREX marketers servicing the small trader. If the intent
is to minimize small retail trading to protect small traders from high risk activity, international brokers
will always be able to fill the demand.
If the CFTC is really interested in tackling market abuses, they should look to those entities that can and
do manipulate the market, namely large financial institutions trading for their own account but with no
legitimate need tied to their financial services business. Prohibit the use of complex derivatives whose
risk to the institution and the domestic economy can not be accurately quantified. And of course we can
not leave out the large speculators like George Soros who has made his fortune by manipulating
currency markets, coming close to collapsing some. If you want a stable FOREX market free of
influence not tied directly to nations' economies, crack down on those that really can move the markets
for their own self-interest alone!
Sincerely,
Jim Stengel
Vacaville, CA
707-451-2964
