Comment Text:
i0-001
COMMENT
CL-03632
From:
Sent:
To:
Subject:
Stawick, David
Sunday, January 24, 2010 9:40 PM
secretary
Fw:
RIN 3038-AC61
..... Original Message .....
From: Bill House
To: secretary
Cc: Stawick, David; Smith, Thomas J.; Bauer, Jennifer; Penner, William; Cummings, Christopher W.; Sanchez, Peter
Sent: Sun Jan 24 21:08:39 2010
Subject: RIN 3038-AC61
ATTN:
Mr. David Stawick,
Secretary
Commodity Futures Trading Commision
1155 21st Street, N.W.,
Washington, DC 20581
FROM:
William J. House, III
Mr. Secretary,
It has come to my attention that a proposal being put forward by your
regulatory organization: RIN 3038-AC61 will have a great and, most
possibly detrimental, impact on the foreign currency market in the
United States and I was compelled to put my views and perspective on
said proposal and is most likely effects into words.
The proposal to change the minimum capital leverage of 10:1 will
severely cripple if not destroy the average retail forex trader's
ability to fund or operate an account due to the need to already have
or somehow appropriate 10 times the current amount of capital to
maintain the same trading volume. If such a proposal is enacted
average forex traders will have no choice but to move their funds to
non-US accounts of foreign brokers to continue trading at the current
market parameters. This will facilitate if not accelerate the amount
of liquid funds already hemorrhaging from the US financial system from
foreign and domestic investors alike leaving the US markets in the
wake of the recent financial crisis. The proposed changes will only
add to the exodus of wealth and prosperity leaving our shores.
If this happens not only will you be driving out the heart of a viable
market that works and has worked for the American people and the world
as an alternate source of revenue and financial stability, but youi0-001
COMMENT
CL-03632
will also be driving good and honest traders into the arms of some
totally unregulated and questionable offshore forex brokers who will
mostly likely, with a 'captive audience' so-to-speak, be unscrupulous
in their dealings with American investors and take them for every
dollar they have. That is money that could have stayed in the US
market if only poorly constructed regulation had not driven them out
and put all but the biggest and most-capitalized brokers out of
business.
Regulation that strangles growth and stifles competition is not the
answer to the financial woes of our great country. The true answer is
judicious and carefully considered moderate regulation based on sound
market principles that allow the risk necessary for growth while
checking the fraudulent actions of dishonest players in the market,
such as some brokers with predatory market tactics used to increase
profits and scammers creating phony forex products and schemes. The
number one component of any successful and fair regulation is
EDUCATION. Educate the people on not just the rules and by -laws, but
also on sleazy tactics that might be used against them.
You can't complain that people crash too much in traffic and then
lower the speed limit to half of what it was in an attempt to prevent
accidents if you never taught them to drive in the first place. In
short: The proposed new rule of leverage limitations does not protect
investors or traders. It will marginalize average retail traders into
nothing. It will do exactly the opposite of protect them. It will
drive force them into harm's way because an investor will now have to
risk 10 times the amount as before to place the same trade or go into
even riskier territory to make the same trade elsewhere. Please think
about this before attempting to make this proposal law. In forbearance
there is wisdom.
Sincerely,
William J. House. III
