Comment Text:
i0-001
COMMENT
CL-01401
From:
Sent:
To:
Subject:
[email protected]
Thursday, January 21, 2010 12:09 AM
secretary
Regulation of Retail Forex
RE: RIN 3038-AC61
My stand on the current CFTC Proposed Regulation of Retail Forex:
I encourage the CFTC [] s effort to reign in the actions of unscrupulous
currency dealers, IB [] s and money managers. If you want to manage money,
or execute authority on a clients account you should be registered. I
also believe the capital requirements are necessary and ultimately weed
out weak dealers from the business. Perhaps this will limit consumer
choice to a few big dealers, but I believe the protection offered is
worth it.
Regarding margin requirements, I am adamantly opposed to the proposed
restrictions. I believe in personal choice, and personal responsibility.
If you do not understand the damage you are a capable of doing through
flae use of high leverage, you should not be trading. It is your
responsibility to understand the market you are participating in,
practice diligently and protect your capital before placing a single
dollar at risk. If you txade without regard to the risks, and lose your
shirt, it[] s your fault. Regulating the leverage available across the
board punishes everyone in the name of protecting the lowest common
denominator among traders, and that frustrates me. All reputable FCM,
IB, CTA or CPOs I know go out flaeir way to warn lxaders about the risks
of trading on margin. Unfortunately, even if you lead a horse to water
you can't make it drink. Even at 10:1 leverage there will be traders who
blow out their accounts, some people never learn. I do not want my
choice of leverage limited in the name of consumer protection. There are
many retail lxaders who have jumped ship overseas already, and I may
follow flaem if these regulations are enacted.
I believe these proposed changes, if enacted will actually have a
negative net affect on retail currency txaders. Instead of protecting
flae consumer, the CFTC [] s actions will drive small volume retail traders
to overseas dealers where leverage can be as high as 700:1! There are
also unregulated dealers overseas who will take advantage of retail
lxaders seeking 100:1 leverage. The Foreign Exchange Dealers Coalition
is correct in their statement saying:
[]Unregulated dealers from around the world will also be the
beneficiaries of the 10 to 1 leverage rule. These unregulated forex
dealers don[]t have to worry about capital requirements, risk management
models, marketing ethics, dealing practices or even returning a
customer [] s funds. These dealers will be out of the reach of the CFTC and
flaey will thrive. []
Sincerely
Duane Megonigle
Retail Trader
FXDC Statement against proposed 10:1 leverage restrictions
