Font Size: AAA // Print // Bookmark

Comment for Proposed Rule 75 FR 3281

  • From: Gerald S Pajon
    Organization(s):
    Bay View Trading Corporation

    Comment No: 89
    Date: 1/15/2010

    Comment Text:

    i0-001
    COMMENT
    CL-00089
    From:
    Sent:
    To:
    Cc:
    Subject:
    Gerald S. Paj on
    Friday, January 15, 2010 1:53 PM
    secretary
    cftcfeedback@fxdd.com
    Regulation of Retail Forex
    Dear Sirs/Madams;
    I have recently become aware of new proposed regulation RAN 3038-ARC which proposes in part to limit
    leverage of retail trading to 10:1. I feel I must speak out on this issue. While I completely understand the reason
    for requiring adequate funding for institutions dealing in "high risk" investing, I feel this particular aspect, (that of
    limiting leverage) is out of line with the general idea of protecting consumers.
    Point (1): Limiting leverage will directly or indirectly protect consumers from institutional mismanagement.
    This is abjectly false. While it is and should be required that retail institutions advise their customers about
    the inherent risk involved in this type of business, it is not the responsibility of government to eliminate
    choice from the consumer, but rather make a level playing field for equal participation. The use of leverage
    allows consumers (us little guys) just this. The ability to place orders (even small ones) that are akin to
    larger institutions and participate, as do large institutions in opportunities presented in financial markets.
    By allowing individuals to participate equally, we are better able to self direct our resources for our benefit
    without relying on possibly (or more probably) fund managers with agendas OTHER than the successful
    management of their client's account.
    Point (2): Allowing the individual to trade with greater leverage places greater risk on the individual's
    account. Again this idea is misconstrued. By allowing the institution to advise clients of risks they are
    taking, the client is made well aware of both the advantages AND disadvantages of risk as it related to the
    use of leverage. Thus once again, allowing MORE choice for the consumer.
    Point (3): Regulations of this nature will have a stabilizing effect on the overall operation of financial
    markets. This again is incorrect. These same consumers will only take their funds (even small accounts)
    to institutions offshore. While government will no doubt do its best to find and regulate these customers, it
    enough of us "average" consumers do this it will take needed funds away from the US economy and add
    the near impossible task of tracking down and punishing EVERY offender, which will NOT bring those
    funds back into the US.
    I urge you to make your regulation more reasonable, and reducing leverage for consumers does NOT accomplish
    this task. Thank you for your attention.
    Gerald SO. Pajon
    President / CEO.
    Bay View Trading Corporation
    (510) 412-0145
    bayvi ewtrading co rp@g mail. co m