Comment Text:
i0-001
COMMENT
CL-08880
From:
Sent:
To:
Subject:
cn_kp
Monday, March 22, 2010 3:36 PM
secretary
Regulation of Retail Forex
Sir:
Re: Public comment on RIN 3038-AC61
The government's intention to raise the approximate margin requirement tenfold for retail forex trading in the US
is poorly thought out for consequences and economic freedom. It is another signal to markets that open
competition, productive innovation in financial services, and economic growth are not goals of the
Administration.
I am not an owner or employee of any brokerage or similar service provider. The government's prospective
altering of a practice that has a proven track record of success as a mechanism for individuals for about 15 years,
and for institutions for about 3 times as long, will deny investment / trading prospects to the vast majority of
participants in the retail forex market, by reducing proportionate profitability drastically. Daily price
movements, as a percent of gross unit contract value of a given currency are very small, hence originally lending
itself to trading margins that were typically 1%, or sometimes less.
Apparently the government is more interested in responding to appeals from the National Futures Association,
including campaign contributions, in order to effectively force some of the remaining depleted business onto
exchanges, where they can make fees on transactions, rather than have investors pay no fees now. Further, the
government apparently overlooks the suitability requirements for participants, as well as the individual
requirement to learn how to trade and to manage risk. Perhaps the CFTC sees itself evolving into a quasi-
parental type organization, whereby it tells the marketplace what the products, terms, and availability will be in
order to show that it is "regulating". The problem is that we live in a world wide marketplace, and the industry
would be decimated. It is unfortunate that this ruling would put thousands of employees, and hundreds of small
businesses out of operation. It would deny millions of people the opportunity to make reasonable profits, in turn
helping the economic recovery. No other country in the world is so gratuitously restrictive with its citizens
regarding forex trading.
This ruling would deny freedom of choice and opportunity. The government further has no conspicuously
productive plans to educate people in trading and risk management, which is where it efforts would be
beneficially constructive. It is a shame that there is little or no balance as to consequences, and lack of positive
outcome for the national business environment in your proposal. Your agency's mandate should be to promote
clean and transparent regulations for the conduct of commerce, not restrictions which decimate a bonafide
activity and industry for the sake of "looking tough on the finance industry" to Congress.
I hope you will re-evaluate your proposal and make productive moves instead of destructive ones.
Regards,
Charles Northeimer
1820 Chautauqua Trail
Malvern, PA 19355
