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Comment for Proposed Rule 75 FR 3281

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  • From: Adrian G Ababa
    Organization(s):

    Comment No: 1714
    Date: 1/21/2010

    Comment Text:

    i0-001
    COMMENT
    CL-01714
    From:
    Sent:
    To:
    Subject:
    Adrian Gaudencio Ababa
    Thursday, January 21, 2010 10:47 AM
    secretary
    Regulation of Retail Forex
    Dear Sir
    /
    Madam,
    RE: RIN 3038-AC61
    I'm
    writing with regards to the the issue above.
    i commend on the CFTC's work to protect the small investors/retail traders like us.
    & yes, some of the suggested changes would provide some protection.
    unfortunately, with regards to clause on leverage, i strongly believe will work towards the
    detriment of the US economy.
    As part of the proposed regulations, it is stated: "leverage in retail forex customer accounts would
    be subject to a 10-to-1 limitation,"
    which means 10:1 leverage would be the maximum amount allowed for all Forex traders in the
    U.S.
    An example below illustrates this:
    Maximum Leverage under Current Regulations
    USD/CHF
    100:1 leverage (one percent)
    1 lot (100,000)
    Margin requirement: $1,000
    Maximum Leverage under Proposed CFTC Changes
    USD/CHF
    10:1 leverage (10 percent)
    1 lot (100,000)
    Margin requirement: $10,000
    based on the example above, a lot of small investors will not be able to learn how to trade & invest
    in Forex effectively.
    most traders learn the ropes of the trade by starting with small accounts & as they mature &
    progress, they start trading in larger accounts.
    but based on this suggested clause, it will force all the Forex trade business out of America & into
    the other parts of the world to America's detriment.
    I stand behind the belief that an individual should be given the freedom and right to choose the
    amount of leverage that is appropriate for that individual's desired risk, and that this basic principle
    of 'choice' is in jeopardy by the proposed ~.C...F.~-..C_..r.~g...U!..a.~!.o..~?..s
    ..
    please re-consider this clause.
    Best regards,
    adrian
    ababa