Comment Text:
i0-001
COMMENT
CL-00177
From:
Sent:
To:
Subject:
[email protected]
Saturday, January 16, 2010 12:24 PM
secretary
Public Comment Form
Below is the result of your feedback form. It was submitted by
([email protected]) on Saturday, January 16, 2010 at 12:23:31
commenter_subject: Regualtion of Retail FOREX
commenter_frdate: January 13, 2010
commenter_frpage: 5772-10
commenter_comments: Public Comment on Proposed Regulations Regarding
Retail FOREX Transactions
To Whom It May Concern: I think lowering the
leverage requirement for retail F OREX transactions
will do the exact opposite in regards to customer
protection.
It wouldn [] t matter if you lowered or raised the
leverage amount in terms of customer protection.
The fact of the matter is many uneducated people
try their hand at FOREX and lose. Reducing leverage
will not change this outcome when FOREX brokers
blanket the internet with advertising promising
fast and easy money with a little disclaimer at the
bottom of heavy risks of loss.
The fact is the FOREX is a zero sum market.
Lowering the leverage of retail FOREX in the U.S.
would do nothing but kill a legitimate business.
Why would Americans keep trading in a climate that
is laden with laws against them? Why would
foreigners open a FOREX trading account in the U.S.
when the rules are prohibitively against them
compared to other jurisdictions around the globe?
[Leverage works for you as much as against you.]
We have already suffered massive restrictions
already from the NFA with imposing No hedge rules
and FIFO. Most U.S. brokers have already opened
brokerages outside the U.S. already due to thei0-001
COMMENT
CL-00177
enactment of these misguided rules and to my
kno~vledge all have plans to do so.
By enacting this legislation to restrict and limit
traders further ~vill only cause a mass exodus of
FOREX trading in the retail U.S. markets. No U.S.
based brokerage under U.S. jurisdiction ~vill be
able to compete ~vith the foreign counterpart.
We live in a global economy but yet ~ve still make
rules and regulations on a single economy scale?
WHY?
This ~vill cause American traders to put their money
in less than scrupulous brokers ~vith less ethics
than ~vhat the U.S. permits via the NFA oversight.
So if American traders put their money in a foreign
FOREX broker ho~v can you say this ~vill benefit the
trader? Ho~v ~vill this benefit the U.S. based broker
if they are unable to compete?
Are ~ve not satisfied until ~ve move all high paying
jobs overseas?
The rule of limiting Retail FOREX transactions to
10:1 leverage should be tossed out and abolished.
Congress intention in giving the FOREX oversight
was not to kill a legitimate business, this is what
you will be doing if this rule is passed.
Before we were hit with all the erroneous NFA rules
and regulations we were afforded up to 400:1
leverage. Guess what? people were blowing accounts
even at that level. Changing the level of leverage
will do nothing to prevent someone from blowing an
account or losing in FOREX.
The U.S. retail FOREX market is an infant when
comparing it to the U.K. and various other places.
Yet they don[]t see the need for these kinds of
rules and restrictions. If you are so worried about
the consumer you should educate them and not
restrict them.
Because an educated trader will know better when
the time comes. Limiting leverage or some of these
other ridiculous things the lawmakers that be come
up with all in the name to protect us from
OURSEL VE S? What a pathetic joke. If it [] s not
obvious already I would hope that you elect toi0-001
COMMENT
CL-00177
leave leverage rates the ~vay they CUlTently are at
the minimum of 100:1. Othe~vise the blood of retail
U.S. FOREX markets are on your hands and the people
you are trying to protect ~vill be leaving your
jurisdiction in droves.
An example below as why this rule of limiting FOREX
retail transactions to 10:1 leverage should be
abolished.
Under CUlTent trading rules:
Trader A trades with a $10,000 account with 100:1
leverage and needs the leverage to withstand
various DD [DRAW DOWN] sequences that happen
randomly. Trader A makes on average $1,000 USD per
month or 10% a month. Trader A could make more, but
due to trading style wishes to keep risk to a
minimum.
Trader A under a 10:1 leverage requirement would be
forced to maintain a $100,000 trading account to
maintain the same risk levels as above. However the
return would fall to 1% a month due to the hefty
investment to keep risk low.
If you put Trader A in a higher trading account the
effect is the same. If trader A has a 20,000
account making $2,000 USD per month the requirement
under 10:1 leverage rules would mean $200,000
trading account investment to maintain risk levels
of that of a 100:1 leverage account.
It is simple mathematics to see why 10:1 leverage
rule should be abolished. If rule is imposed you
have just killed the U.S. based retail FOREX
market. The people you say you are trying to
protect will be fleeing your jurisdiction for more
favorable conditions.
Additionally the previous rules imposed by the NFA
[FIFO and No Hedging in same FX acct] should be
reconsidered as they do nothing in the way of
promoting or allowing U.S. based brokers a
competitive edge in the Retail FOREX business as
the opening of Foreign Brokerage offices by U.S.
based brokers would clearly show you.
Sincerely,
Ray Austini0-001
COMMENT
CL-00177
commenter_name: Ray Austin
commenter firm: n/a
commenter ~vithhold address on: ON
commenter address 1 : 5018 T ain Drive
commenter_city: Houston
commenter state: TX
commenter_zip: 77084
commenter fax: 281-463-0696
commenter~hone: 713 -530-8251
