Comment Text:
10-002
COMMENT
CL-07842
From:
Sent:
To:
Subject:
Kai and Sharon
Wednesday, March
10, 2010 5:57 PM
secretary
Regulation of Retail Forex
Dear
Sirs,
I would like to hereby express my deep concern with the intentions of CFTC to limit
the maximal leverage for retail Forex brokers from the current 1:100 to 1:10. In my
opinion, the following scenario is likely in that event:
1. The maximal leverage requirement will be increased for all US-regulated brokers
from the current 1:100 to 1:10. This will clearly demonstrate a complete dismissal of a
regular Forex trader's interests if they happen to be conflicting with the interests of
the "big wallets" - banks and non-retail futures brokers. We do not wish to be
"protected" till we go broke just to make them even richer.
2. US-based retail Forex brokers will sure be unwilling to lose their business
completely. They've already got burned with the recent self-imposed regulations of
the NFA (which is not even a government agency, although many traders are made to
believe it is) and now clearly realize the 1:10 leverage will be the last nail into their
coffin. These retail brokers will therefore start moving their businesses to other
countries and servicing US customers from there, successful examples of which
already exist: Dukascopy in Switzerland (which has recently introduced MT4 in
addition to their custom platform), ATCBrokers and FXCM in the UK, FXDD in Malta,
FXPro in Cyprus etc.
3. The US government in response will do everything possible to prevent US traders
from enjoying the benefits of being serviced in other countries by making overseas
transactions to personal bank accounts even more controlled and restricted.
4. Those traders who make a living from their trading will then have no other choice
but to set up offshore companies for themselves through the Internet (contrary to a
popular belief, this doesn't cost much - one can get an offshore company with an
overseas bank account for as low as $1,500).
5. As all (or most) trading accounts will be on the companies' names, the US
government may heavily lose on the income tax they collect from US Forex traders.
Thus, trying to harm the average Joe trader and make the banks and futures brokers
richer at his expense, the government is harming themselves in the end.
This action will negatively impact the world's view of America being the land of
opportunity.
Sincerely,
Sharon Tiffany
