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Comment for Proposed Rule 75 FR 3281

  • From: James Goldstein
    Organization(s):

    Comment No: 5133
    Date: 2/8/2010

    Comment Text:

    i0-001
    COMMENT
    CL-05133
    From:
    Sent:
    To:
    Cc:
    Subject:
    software777
    Monday, February 8, 2010 6:53 AM
    secretary
    Smith, Thomas J. ; Bauer, Jennifer ;
    Penner, William ; Cummings, Christopher W.
    ; Sanchez, Peter
    STRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF
    RETAIL FOREX PROPOSAL RIN 3038-AC61
    Attn : David Stawick, Secretary, CFTC and ALL CFTC policymakers:
    As a non-affiliated US-based Retail FX trader, please note for the record that I am
    STRONGLY
    OPPOSED
    to the 10-1 leverage limit as proposed in RIN 3 03 8-AC61 relating to the Regulation of Retail
    Forex.
    Counter-productive effects
    This senseless limit would in NO way protect, aid or benefit me but rather would greatly harm me since
    this restriction, if passed,
    ¯ would require that I submit substantially more margin-funds into non-protected, non-FDIC insured,
    non-SIPC eligible accounts, actually exposing me to increased risk in the event of bankruptcy of my
    Forex Broker.
    ¯ would NOT divert my business into regulated-Futures trading (as the CFTC is probably hoping), but
    rather would cause me to seek an unreliable, higher-risk offshore FX broker to trade through, whose
    practices might be questionable.
    ¯ would eliminate one of the greatest benefits of trading Forex : My ability to efficiently deploy my
    own trading capital in the way that I choose.
    Lower FX vols require far greater leverage
    FX volatilities are generally substantially lower than in the Equities or Futures market. Therefore,
    significantly more leverage is required simply to capture equivalent trading opportunities.
    Nanny not needed
    I do not want the CFTC to treat me like a child and dictate how I should trade. While 100-1 leverage is
    available to me - should I choose it - I am never forced to use it. The bottom line is that OTC Retail Forex
    trading is NOT Futures trading. Please do not try to treat it as such!
    PLEASE IMMEDIATELY STRIKE YOUR PROPOSED 10-1 LEVERAGE LIMITATIONS.
    Don't let proposal RIN 3038-AC61 become an expensive lesson in unintended consequences ....
    Thank you.
    Good Day.
    James Goldstein