Comment Text:
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COMMENT
CL-05484
From:
Sent:
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Subject:
Chris Arnold
Sunday, February 21, 2010 10:27 AM
secretary
Regulation of Retail Forex
Hello,
I am very concerned about the proposal to increase the margin requirements for Retail Forex, for more than one
reason.
First, on the personal level, I have been training for a year to be a trader. I am about to launch my trading business
as a corporation.
A new regulation like this would severely limit my ability to grow my trading account.
I am 60 years old, my retirement savings are not going to last a lifetime.
Yet, now after this year of intense study and training I am confident I know how to manage the realities of leverage
and loss control. I am confident I can do this and do well.
What alternatives do I have? Even though I am smart and technically skilled, no one is going to hire me at my age.
And, I am not alone...there are likely hundreds of thousands like me in my age group with no employment
future .... and probably millions of younger Americans who will be unemployed or underemployed for a long time. The
jobs shipped to India (tech jobs) or China (manufacturing) are not going to come back.
In response to this, many, many US Citizens are learning to trade. Some are going to do well, if you don't change
the regulations. There is an infrastructure being built out now in the educational and brokerage firms, and even the
banks, that are preparing to serve this new demand. Please take a look at this. It is not small.
Those people who are suited for the career of trading, allowing themselves to become well prepared, practiced, and
trained, will have self created jobs, they will be paying local taxes, and Federal taxes. They won't need
unemployment, and they have money to spend in their local economies. Not only that, they can work from home,
creating less demand for oil, and less traffic.
(Not everyone will have an aptitude for this work...but many will.)
The use of leverage in the Forex retail market is a beneficial thing to a person with the right skills to use it. It is not
like giving a mortgage to someone who has no money. And, it is not the same as the leverage created by the
Investment Banks that caused the financial system to almost collapse. It is not the same dynamic, and its scope is
very small. Please don't make the mistake of seeing all leverage as evil. The leverage in the Forex market, if used
wisely, allows a well trained individual to create an income for himself, and his family, without relying on the
external job market, and without the need to have a million dollars to invest.
BUT, beyond that...there is now an infrastructure being built in the US to serve the retail Forex trader. If you
implement the higher margin requirements, first this infrastructure and all the jobs that it is creating, is about to
create, and will be creating, and all the tax revenue that goes with the business income, and those jobs, is going to
disappear. It will never form.
Instead it will grow outside your jurisdiction. You will be giving all the transaction business to London or Switzerland,
or even in the future, to Hong Kong or Singapore. Or Australia or New Zealand .... I'm sure they would love to have
the business. The only limitation is how they can access the fastest internet backbones.
There are already very good, highly regulated Swiss Forex brokers, more than willing to accept the US customers
you would be pushing away. The same for London.
(By the way, London probably has more Forex transactions than the USA in any given day. The US is the second
market.)
If the US Forex Retail Trader moves his accounts to London or Zurich, that in turn would force US Retail Forexi0-001
COMMENT
CL-05484
Brokers, if they wanted to stay in business, to move offshore outside your regulation, taking the jobs with them, and
the payroll tax revenue, if not more.
You have a tremendous opportunity here to allow the formation of a new industry in the United States .... one where
well trained individuals (i.e. "taxpayers") can participate in the truly massive and dynamic world's currency markets,
having equal access as the worlds largest banks. This type of access is relatively new...with a new type of Retail
Forex Broker building out the infrastructure and creating a base for secure and integrous transactions required by
the Forex trader.
Really, I cannot see any positive outcome for our country, if these regulations are implemented.
Actually I would suggest the opposite .... keep the margin requirements as they are, and institute college level
trainings for a person to enter the self-employed trading profession, so, if they are capable, can compete against the
giants with success. The tax system and local economies will thank you.
Thank you.
Chris Arnold
