Comment Text:
i0-001
COMMENT
CL-07753
From:
Sent:
To:
Subject:
Russell Anderson
Tuesday, March 16, 2010 12:41 AM
secretary
Regulation of Retail Forex
I am a retail trader in FOREX and have been involved in investing for over 30 years. Forex trading now constitutes
the majority of my livelihood. I find portions of the proposed legislation, such as the dealing desk regulations, quite
commendable.
However, your proposed limitations on leverage will be devastating to the retail trader. They will in fact destroy any
possibility of maintaining a retail trading account in Forex. As proposed, Section 5.9 - Security Deposits for Retail
Forex Transactions, will only serve to achieve the following negative reults:
1). The retail Forex industry in the US will be destroyed with an accompanying impact upon unemployment and the
US talent base.
2). The US tax-base will be further eroded as yet another industry is forced offshore.
I oppose Section 5.9 of the proposed regulations for the following reasons:
1). In reading the Congressional Record, I find NO indication that Congress intended the CFTC to regulate leverage.
2). Unlike other leveraged investments where the potential for loss is infinite and you can loose far more than
originally invested and suffer numerous margin calls, your exposure to loss in a Reatil Forex account is limited to the
free equity in your account less the initial margin rquirement for the position. Therefore your risk in Forex is far less
than when employing leverage in other forms of investment.
2). The NFA as a self policing industry entity has already responded to market realities by adjusting margin
requirements.
In summary, I applaud the efforts to reign in unscrupulous dealers, brokers, individuals, etc. However, at the same
time, Section 5.9 will spell the death of Retail Forex in the US. and I am therefore vehemently opposed to the
implementation of any regulation limiting the leverage of Forex. If implemented, you are destroying the sole means
of support for me and therefore for my family.
Thanks
Russell Anderson
Russell Anderson
Lake Charles LA, 70605
russanderson@centurytel, net
