Comment Text:
i0-001
COMMENT
CL-05087
From:
Sent:
To:
Subject:
Tim Rayment
Saturday, February 6, 2010 5:56 AM
secretary
Regulation of Retail Forex
Dear CFTC,
RIN 3038-AC61
I am an individual trader in England, with accounts at two US forex brokerages (PFG and GAIN
Capital).
I write to express my dismay at the proposed reduction in leverage to 10:1.
I fully support your proposals to register brokerage firms; indeed, I was very lucky not to lose money
in the fraud at COESfx, against whom the CFTC took enforcement action in 2005. I pulled my funds
out just in time.
But I fear that your proposal to reduce leverage will have three perverse consequences for me as an
individual trader:
1) It will INCREASE my counter-party risk, because I will be forced to keep my assets with a forex
broker instead of keeping them at a bank here in the UK, protected by UK retail banking legislation;
2) It will INCREASE my trading risk, because I will no longer be able to take multiple positions in
different currency pairs without risking a margin call. This will damage my ability to diversify my
trading risk;
3) There is a HIGHER risk of abusive practices by retail forex brokers, who will be tempted to close
losing positions as soon as the margin in the account falls a cent below 10%.
I wish you well in your endeavour, but please do not reduce the maximum leverage. The lower the
leverage, the higher the counterparty risk -- and the higher the risk of market abuses such as
compulsory but unnecessary position closures.
With best wishes,
Tim Rayment
19 Excelsior Mill
Stepping Stones
Sowerby Bridge
West YorkshireHX6 4FD
United Kingdom
i0-001
COMMENT
CL-05087
