Comment Text:
i0-001
COMMENT
CL-00196
From:
Sent:
To:
Subject:
Phillip Decker
Saturday, January 16, 2010 5:04 PM
secretary
Regulation of Retail
Forex
As an individual trader I would be victimized by the 10:1 leverage
item in this proposal.
While such lower ratios are fine for trading other commodities, they
are entirely unsuited to the forex market. In this market,
the
numeric value changes are so small, (relative to that of other
commodities), that to have any noticeable gain or loss, tens to
hundreds of thousands of dollars must be leveraged in a given
transaction.
I realize that the brokerage finns themselves have issued a letter to
this effect, but I want the commission to know that such changes don't
just impact the large finns, who are sometimes considered faceless
entities. This sort of thing actually hurts the average citizen, like
me, who is only trying to make their investments last them into
retirement.
As an example; last year the NFA added a number of unhelpful and
restrictive regulations, such as rules against hedging.
This is outside what they should be regulating - it's not about
ensuring that brokers have enough liquid to pay back their investors,
etc. This is direct meddling in actual trading strategy. Since they
have already done this, and no one knows what will come next, I moved
all my accounts to brokers in other countries. Being a "non-nfa"
broker has become a catchphrase for advertising outside the US, and
people are investing elsewhere in droves. Why deal with unrealistic
regulation that clamps down on your leverage and defines how you trade
if you don't have to?
All that this proposed rule would guarantee is the acceleration of
the
exodus to offshore brokers, since no one could use a US broker unless
they controlled a substantially larger sum of capital than nearly any
individual would realistically have. A person would have to mortgage
flaeir house to be able to hold open only a few trade positions.
Isn't this missing the point of the market regulatory agency to start
with? I understood the purpose was to protect the individual
investor. This is doing the opposite. Individuals would instead be
forced to use offshore brokers to even participate in the market at
all.
I was hoping that after a few years, some committee would notice all
the
undesired consequences of these regulations and overturn them,
bringing the business and tax revenue back to the US. It appears that
may not have been a reasonable expectation.
