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Comment for Proposed Rule 75 FR 3281

  • From: Sheree Landers
    Organization(s):

    Comment No: 904
    Date: 1/20/2010

    Comment Text:

    i0-001
    COMMENT
    CL-00904
    From:
    Sent:
    To:
    Cc:
    Subject:
    Sheree Landers (rsl)
    Wednesday, January 20, 2010 2:06 AM
    secretary
    Sheree Landers (rsl)
    Regulation of Retail Forex
    David Stawick,
    I have only rarely given my view in electronic format, however the pending CFTC legislation
    has one major area I take issue with: namely the proposed leverage change at 10 to
    1. [ RIN 3038-AC61 ] It is one thing to implement rules to require companies to be more
    financially sound and stable, it is quite another event to then control their customer base
    actions with changes which will only force them out of the US.
    As a FOREX trader, I am already thoroughly and completely outraged with the recently
    passed NFA no-hedge rules with
    No-StopLoss rules ..... Now this outrageous proposal: RIN 3038-AC61, to limit to leverage
    to a ludicrously small 10:1. The FOREX market thrives on leverage, where other markets
    do not. Comparative market analogies or justifications or models do not directly apply to
    the unique FOREX market. The financial constraints this proposal places on the retail
    trader, will not provide realistic or significant protection for the new trader and only make
    trading unnecessarily more difficult for the serious trader. Particularly in light of the fact that
    anyone who currently does not like the recent NFA rules has ready moved off-shore
    and with passage of these now proposed leverage constraints, thousands more will move
    off-shore. Actually the end result is only, the really clueless will even attempt to trade under
    these leverage constraints in the US. Smart FOREX traders will open accounts off-
    shore/overseas.
    This change will also have the direct effect of many more US people loosing more money
    and many US jobs disappearing: again => going off-shore/overseas.
    Certainly the proposed leverage change will hurt the US trading industry and US citizens.
    The proposed rule 'may' have an arguable basis, however it is certainly only justification
    or a sad rationalization rather than a valid change that will hurt the industry rather than help
    or protect is traders or investors.
    There are numerous other ways to reduce the new traders losing all their money, i.e.
    Require 'proven' online demo trading with at lest 51% success for 400 trades before going
    'Live' in the market. Limit trade entries that over leverage an account at entry. Just a
    couple simple areas that would not destroy the industry for existing traders and make it
    safer for new entrants.
    Cutting leverage as proposed will not change trading habits, it will only force movement of
    traders and their accounts off-shore.
    The rule change proposed is based on erroneous suppositions, it is completely idiotic andi0-001
    COMMENT
    CL-00904
    baseless in the realities of the retail market investor and trader.
    Please eliminate/strike/remove this proposal: RIN 3038-AC61, 10:1 leverage constraint and
    leave at the present industry ranges ... 100/1,200/1 etc.
    Regards, a Retail Forex Trader