Comment Text:
i0-001
COMMENT
CL-00184
From:
Sent:
To:
Subject:
sreechand boppudi
Saturday, January 16, 2010 1:47 PM
secretary
Regulation of Retail Forex
Dear Secretary Stawick,
Greetings. I appreciate your efforts to reduce the fraud in retail forex market. However reducing the
leverage to 10:1 will make the entry barrier high for many ordinary people like me. To make any
reasonable money one would need to deposit a high amount even to trader a single contract. This will
keep the market to high net worth individuals/institutions and will deny the small guys an opportunity to
participate and to make reasonable returns.
Also one other concern is that in the futures market where most contracts are valued at $50000+, the day
trading margins offered by many FCMs are $500 per contract. Given this I am failing to understand why
retail forex market is treated differently. As a trader I can tell you that forex market trends a lot better
than futures market in general and though it appears volatile it creates a lot more opportunities for
investors of all personalities.
A third issue is many UK, Swiss and German banks offer forex trading in a less restrictive environment.
If this rule were to go through, many retail clients will invest with these dealers outside the US. This will
wipe out the domestic retails forex industry resulting in hundreds of job losses. I do not think when
Congress asked to regulate the retail forex market it was their intention to wipe out it altogether. United
States is a world leader in Financial Industry and keeping this industry going strong is vital for our
economy.
Given this I urge you to keep the leverage at a minimum of 100:1 and strengthen your efforts in the
following areas.
1) Require as many dealers and IBs to register.
2) Segregate client accounts from corporate accounts no matter what the size is (EU has this policy in
place)
Best regards
- Sreechand Boppudi
