Comment Text:
i0-001
COMMENT
CL-05227
From:
Sent:
To:
Cc:
Subject:
Antonio S Brasse/NYLIC
Monday,
February 8, 2010 5:26 PM
secretary
kirsten_gillibrand@gillibrand, senate.gov
Regulation of Retail Forex
These comments are in relation to the proposal to lower the maximum
leverage allowed by retail forex customers from 100:1 to 10:1 (
identification number RIN 3038-AC61). I am also CC'ing the office of our US
State Senator Kirsten Gillibrand, whom just recently spoke at our New York
Life Headquarters today, to bring awareness to this issue. I find it very
relevant to her office as many of the retail forex brokers are located
right here in NYC.
I have very serious concerns regarding this proposal, both as a retail
forex customer/trader and as a US citizen overall.
As a retail forex customer, I am very concerned about having my freedom and
right to choose the amount of leverage that is appropriate for my
individual desired risk taken away from me. I am a firm believer in
personal responsibility and traders should make intelligent decisions on
what their acceptable risk levels are and should take responsibility for
both their good and bad decisions. Additionally, this proposal would be
handicapping the US based retail forex trader in the world of forex, where
other non-US based traders can still trade at higher leveraged amounts and
institutional and central bank traders will dwarf retail traders at very
dangerous magnitudes making the retail trader even more susceptible to the
legal forms of manipulation that occurs in the forex market. I understand
that this proposal is probably related to wanting to protect the average
consumer/trader, but this proposal will actually make it far more risky for
the average trader/consumer. Take into consideration this: currently a
retail trader would need only $100 to trade a particular position but under
the new proposed leverage, a trader would need $1,000 for that same
position, having their risks increased ten fold because of this proposal.
Now if you multiply that number and compare $1,000 used now for a trade to
needing $10,000 for the same trade under the proposal, you can see how
badly this situation can get for the regular average American forex trader
under this proposal. If I may, I believe a better solution to protect the
average retail trader would be to institute some kind of training or
certification course where the potential trader will have to prove certain
basic knowledge of the forex market and risk management as it relates to
forex before they are allowed to trade. This could be outsourced to
organizations that already provide forex training so the government would
not need to incur any huge additional costs to set up a program from
scratch. You would just need to formalize the process for reporting
purposes to the CFTC and also to provide brokers with information that a
potential trader has completed a course and is eligible to trade.
As a US citizen, my concerns are far more serious. We would be handicappingi0-001
COMMENT
CL-05227
our country in just one more marketplace, adding it to the many other areas
~ve've handicapped ourselves already, unfortunately, this time, it ~vould be
the largest marketplace to have every existed on this planet that ~ve ~vould
be losing a huge competitive edge on. While ~ve go do~vn to 10:1 leverage,
other countries ~vill remain at 100:1 all the ~vay up to 400:1 leverage. Our
US-based forex brokers ~vill go out of business because any intelligent
forex trader ~vill move their account overseas so they can keep the po~verful
leverage. Jobs ~vill be lost and tax revenues (both W2 and investment
related) ~vill be lost as traders look to overseas markets to trade
currencies and our domestics brokers are driven out of business. In our
current economic climate, ~vhere the j ob market and government revenue
situation are already at dangerous points, this ~vould have devastating
effects for this proposal to become la~v.
As a concerned retail forex trader and US citizen, I urge you not to pass
any ne~v regulations that ~vill affect the current maximum leverage allo~ved.
Thank you for taking the time to consider our comments on this issue. If
you ~vould like any additional feedback from me, please do not hesitate ~vith
regards to contacting me. Thanks again for your time.
Antonio Brasse, CPA, CIA, CFSA
Corporate Audit Staff
Corporate Audit Department
Ne~v York Life Insurance Company
51 Madison Avenue
New York, NY 10010
Phone: 212-576-6145 (Direct Line)
Fax: 212-589-4447
Antonio S [email protected]
