Comment Text:
i0-001
COMMENT
CL-05019
From:
Sent:
To:
Subject:
ITEX Global
Thursday, February 4, 2010 5:48 PM
secretary ; Stawick, David ;
Smith, Thomas J. ; Bauer, Jennifer
; Penner, William ; Cummings,
Christopher W. ; Sanchez, Peter
; [email protected]
Re: REGULATION OF RETAIL FOREX PROPOSAL R1N 3038-AC61 -
OPPOSED
Attn: CFTC
I strongly object to your efforts to over-regulate, via the wrong approach, the OTC ("Retail") Forex Market.
While any reasonable crime-fighting & anti-fraud provisions are welcomed, your efforts to delve into the nitty-
gritty nuts&bolts and nuances of how our industry operates are misguided and wrongheaded.
Probably, the CFTC hopes that in passing this (unreasonable) proposal, OTC Retail Forex can be
'converted' into an industry so nearly identical to on-exchange futures-trading that most O TC Retail
Forex traders will switch to futures-trading for the central-clearing counterparty & segregated
customer funds benefits.
Wrong.
On-exchange Futures trading, even with currency futures, is dramatically different from OTC Cash Forex. For
example with Futures I can not
1.
Trade commission free (This is a VERY important distinction - One which we all hope NEVER
disappears
2. Trade at 100-1 leverage
3. Efficiently trade in large size
4. Trade in odd-lot amounts (such as 3 USD, or 123,456 USD)
5. Trade to an odd or off-the-run value date
6. Trade with razor tight bid-ask spreads (currency futures bid/ask spreads are far wider)
7. Efficiently trade esoteric currency pairs such as EURAUD or GBPNZD or CADJPY or even GBPJPY
(There are no futures for these)
8. Trade with quite the same level of anonymity
9. Cross-net my exposures for margining efficiencies (This is a HUGE benefit)
10. As efficiently or successfully conduct interest-rate carry trades
11.
Trade in EITHER USD amounts OR in Currency Amounts
12.
Trade a FULL 24 hours a day, 6 days per week
These are VERY IMPORTANT differences that, as non-trading bureaucrats and attorneys, I know that you do
not appreciate. THE VERY DISTINCT NATURE of OTC (Retail) FOREX MUST BE RESPECTED &
PROTECTED.
If you try to coax & lure us away from OTC Retail Forex into futures, or even try to convert OTC Forex into a
what will effectively be a future, then we will lose all of the above benefits.
As I alluded to at the beginning, while your crime fighting efforts are encouraged, please respect our market
and not try to change its very nature.i0-001
COMMENT
CL-05019
Please leave the choice of having up to 100-1 leverage intact.
maximum leverage level for this market.
Thank you,
Mike Farmer
Vermont
Retail OTC FX trader
It is the correct
