Comment Text:
i0-001
COMMENT
CL-08623
From:
Sent:
To:
Subject:
[email protected]
Friday, March 19, 2010 4:06 PM
secretary
"Regulation of Retail Forex"
I am writing to express my strong opposition to the proposed change requiring 10:1 leverage limitations. I
feel that requiring a larger investment per lot to trade currencies would be detrimental to traders, brokers and
even the country as a whole.
Forex traders have constant reminders in the form of disclaimers telling them that forex trading is risky. There
is no need for a regulation to protect forex traders from themselves. We see these disclaimers daily on our
brokers' web sites, at any training seminars or educational web sites we may visit, and in every book published
on the subject. The small amount per lot we are able to invest is protection enough.
I am convinced that those who are truly interested in trading the forex will find a way to do it in a manner that is
acceptable to them. If a larger investment per trade is required in the United States, traders will simply invest
their money in other countries with foreign brokers. Thus, our U.S. Dollars would be leaving the country at a
time when our economy can afford it the least. Is using a foreign broker a risky practice? Of course it is. But if
these people were risk-averse they wouldn't be forex traders in the first place.
I believe that this change would drive many brokers out of the forex business altogether, thus eliminating
valuable jobs, again taking a toll on our already-strapped economy. We need to be encouraging job creation,
not job elimination. If anything, I feel forex trading should require a smaller investment per lot, not a larger one.
The more people who are able to participate, the better. Give the small investor a chance to earn a living
trading the forex. For many otherwise unemployed people, this industry can be a godsend.
I happen to be disabled. Trading is the one thing I can do without leaving the house to make a living, don't
have to pay for lunches out, buy an expensive work wardrobe or spend money for gas, to participate in trading.
If I don't feel well enough to get dressed, it doesn't matter. I can still be successful and self-supporting. Can
you imagine how uplifting that is for me? Don't you think that a person who has lost his or her job and has been
unable to find a new one could use just such a boost? But, if those people have to come up with $1000 per
trade, the opportunity is probably closed to them. Is it risky for them to trade? Of course, but they will be
warned about that repeatedly before they start trading and continuously during their trading careers. Let them
make their own choices whether or not to take the chance. Taking risk is part of the American psyche, a part of
the culture. Give all of us the opportunity to succeed.
Take a cue from the stock market. What is the difference between risking money on a stock that can plummet
in value and a currency that can lose value? Well, the company can go out of business or have a disaster (like
Enron, the travel industry after 9/11 or the current Toyota fiasco). But, in all likelihood, a country will probably
not go bankrupt, rendering its currency completely worthless. The broker could go out of business and keep
whatever money you have left in your account, however (remember Refco?). Requiring larger deposits on the
part of customers will not protect against that --- it will only give customers greater risk by requiring them to
have larger amounts of money on deposit with the broker.
Here's a way to protect traders: Why not require brokers to change the customer agreements to delete the
wording that makes the broker the owner of the customer's money while it is on deposit. Don't allow the
broker free rein, able to use all of the funds on deposit for reasons other than trading. In the case of Refco, the
president made loans to himself using funds on deposit that he had no intention of paying back.
When customers deposited money with that firm, they certainly did not realize that they were offering the
company president an unlimited supply of ready cash. Require the brokers to use customer deposits for
nothing but trading.
That would have protected me when I went with the firm I thought to be the largest
and safest forex broker.
I believe that your motive is an honorable one (to protect individual traders), but I believe the consequences of
changing the leverage requirement to 10:1 will do just the opposite, and cost our nation dearly with respect to
lost dollars and jobs. Let each trader be responsible for his or her own trading decisions. It's your job to
regulate the brokers, not the traders. Let each individual take responsibility for his or her own money.i0-001
COMMENT
CL-08623
I urge you to abandon the idea of 10:1 leverage. Thanks you for considering my point of view.
Mary L. Kimble
7321 Canterbury Avenue
Saint Louis, Missouri 63143-3436
USA
(314) 781-7532
[email protected]
