Comment Text:
i0-001
COIMMENT
CL-06622
From:
Sent:
To:
Subject:
Jacob Beasley
Monday, March 8, 2010 9:28 PM
secretary
Regulation of Retail Forex
Dear Sirs,
I would like to hereby express my deep concern with the intentions of CFTC to limit the maximal
leverage for retail Forex brokers from the current 1:100 to 1:10. In my opinion, the following scenario is
likely in that event:
1. The maximal leverage reguirement will be increased for all US-regulated brokers from the current
1:100 to 1:10. This will clearly demonstrate a complete dismissal of a regular Forex trader's interests if
they happen to be conflicting with the interests of the "big wallets" - banks and non-retail futures
brokers. We do not wish to be "protected" till we go broke just to make them even richer.
2. US-based retail Forex brokers will sure be unwilling to lose their business completely. They've
already got burned with the recent self-imposed regulations of the NFA (which is not even a government
agency, although many traders are made to believe it is) and now clearly realize the 1:10 leverage will
be the last nail into their coffin. These retail brokers will therefore start moving their businesses to other
countries and servicing US customers from there, successful examples of which already exist:
Dukascopy in Switzerland (which has recently introduced MT4 in addition to their custom platform),
ATCBrokers and FXCM in the UK, FXDD in Malta, FXPro in Cyprus etc.
3. The US government in response will do everything possible to prevent US traders from enjoying the
benefits of being serviced in other countries by making overseas transactions to personal bank accounts
even more controlled and restricted.
4. Those traders who make a living from their trading will then have no other choice but to set up
offshore companies for themselves through the Internet (contrary to a popular belief, this doesn't cost
much - one can get an offshore company with an overseas bank account for as low as $1,500).
5. As all (or most) trading accounts will be on the companies' names, the US government may heavily
lose on the income tax they collect from US Forex traders. Thus, trying to harm the average Joe trader
and make the banks and futures brokers richer at his expense, the government is harming themselves in
the end.
Since recently, America (which I really love) has been turning from a land of opportunities to a land of
restrictions. Very sad to see this, indeed.
Yours sincerely,
Jacob Beasley
