Comment Text:
i0-001
COMMENT
CL-06721
From:
Sent:
To:
Subject:
hart tamunotonye
Wednesday, March 10, 2010 10:00 AM
secretary
Regulation of retail Forex
sir,
i wish to comment that the regulation should be at 100-1
leverage.
From:
"Alpari (US), LLC"
To:
[email protected]
Sent:
Mon, 8 March, 2010 12:34:56
Subject: CFTC Propsal - 3 weeks left for comments
Dear Traders,
We are sending you this follow up email to remind you that you have a voice and there are only three weeks left! The CFTC is
accepting comments on it's proposal until March 22, 2OLO. We strongly encourage you to submit your comments to them during
this time period. Below you can find the response of Alpari (US) in regards to the new CFTC proposed regulations.
Alpari (US) Speaks out about the CFTC Proposal
On January 13, 2OLO, The Commodity Futures Trading Commission (CFTC) released a
public proposal,
Requlation of Qff-Exehanqe Retail Foreign Exehanfe Transactions and
Intermediaries,
which imposes new requirements on the U.S. Forex industry. The
proposal significantly changes the leverage permitted on certain accounts and, if passed,
would have a drastic effect on retail investors. In the CFTC proposed regulation, leverage
in retail forex customer accounts would be subject to a lO-to-1 limitation.
Currently, the CFTC enforces lOO:1 leverage (a 1% margin requiremen0 to open and
maintain a position on a forex transaction. With the lO:1 leverage proposed, retail traders
would be subject to a lO% margin requirement. Retail traders would have to invest
significantly more to place trades of the same size, ultimately resulting in a decreased
return or loss on invested margin.
~
The risk-reward ratio that is so appealing to the
average investor today under lOO:1 leverage would no longer be available if the proposal is
passed.
The effect of this change can be summarized through the following example:
iCurrency
Price
~ransaction ~Current Marg~ ~Proposed Marg~
~Pair
Quote
~size iRequirement at ~Requirement at
i
::~oo: ! Leverage i~o
:! Leverage
~i~i57~ii5~i5 .........
7:;1~~~ ..............
~;~Ti~f~;~= ......... ~;;i~:~,~ ........................ ~~;7;~~~:~ ......................
::100,000
~~i~;~:)~;;; ......................
............................................................ i!~ ..................................................................................................................i0-001
COMMENT
CL-06721
Alpari (US) has always been a strong supporter of ethical and fair business practices and
the protections offered to traders through industry regulation. However, Alpari (US)
does not support ~h.i~ CFTC proposal.
Alpari (US) believes that this proposal discourages beginners from developing and
strengthening their trading style. It effectively prevents investors from evaluating their
own appetite for risk and making personal investing decisions.
We place a strong emphasis on educating traders to make informed and responsible
decisions. We believe that, with proper education, it is not necessary for the U.S. Forex
industry to be subject to these regulations. Only recently have the doors opened for retail
investors to trade in this market; these doors are effectively closed through the proposed
rules, once again making the FX market accessible only to financial institutions.
Our goal is to guide you in understanding the intentions and ranfifications of this proposal
and renfind you that, as a retail investor, you have a say in how your freedoms are
controlled. We believe that this is a decision to be made by the traders, not the
regulators. You are the largest group who can make these ranfifications heard.
We encourage you to send your comments to the CFTC during the 60 day period, ending
on March 22, 2OlO. If you have an opinion on whether the CFTC should restrict
leverage across the board to ao to a, we want you to voice it. Send your comments to
seereta [email protected] and include "Regulation of Retail Forex" as the subject line of
the message. Additionally, you can file comments online., by fax at 2o2-418-5521 or
by
mail
to:
Secretary of the Conmfission
Commodity Futures Trading Conmfission
Three Lafayette Centre
aa55 2ast Street NW
Washington, DC 2o58a
Team of Alpari (US)
a4 Wall Street Suite 5H
New York, NY aooo5
Tel: 646.825.5760
Fax: 646.825.576a
www.alpari-us.com
NFA ID: o379678
~The potential of profit is equal to the risk of loss on all leveraged transactions.
Risk Warning: Trading foreign exchange, commodity futures, options, precious metals
and other over-the-counter products carries a high level of risk and may not be suitable
for all investors. The high degree of leverage associated with such trading can result in
substantial losses, as well as gains. The past performance of any trading strategy or
methodology is not indicative of future results, which can vary due to market volatility; it
should not be interpreted as a forecast of future performance. You should carefully
consider whether such trading is suitable for you in light of your financial condition, level
of experience and appetite for risk, and seek advice from an independent financial
advisor, if you have any doubts. Alpari (US), LLC is registered with the
CFTC as a Futures
Conmfission Merchant and is a member of the NFA-
Member ID: o379678.i0-001
COMMENT
CL-06721
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