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If you have or are thinking of opening an account at any forex broker in the USA, I want you to write a letter.
If the USA does this, it is possible that other countries might do the same. Even if you aren't ever planning to open an account at a US forex broker, you can still tell them that this rule will ruin retail forex.
Here's the contact information and instructions from the article...
Quote:
What to do
It's not a law yet. There's still time to complaint and try to stop this.
Before I tell you where to complain, be aware: All comments sent to the CFTC on this topic will be very public. Ranting about government conspiracies won't help. Typing profanity IN ALL CAPS is very tempting in this case, but it won't help. Ten well worded individual letters will carry more weight than 100 copied and pasted letters or even a single petition with hundreds of signatures. I would be honored if you do quote some of this article and/or include a link to it in your complaint, but please also express your feelings in your own words too.
According to the rather lengthy (193 pages) document detailing these proposed rules, this is how to complain:
You may submit comments, identified by RIN 3038-AC61, by any of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov/search/index.jsp. Follow the instructions for submitting comments.
• E-mail: secretary@cftc.gov. Include “Regulation of Retail Forex” in the subject line of the message.
• Fax: (202) 418-5521.
• Mail: Send to David Stawick, Secretary, Commodity Futures Trading Commission, 1155 21st Street, N.W., Washington, DC 20581.
• Courier: Same as Mail above.
All comments received will be posted without change to U.S. Commodity Futures Trading Commission, including any personal information provided.
Please, write something and submit it. Even a few sentences. Focus on what that 10:1 rule will do to your trading. Tell them how much money you may move to an offshore broker. Tell them they are costing jobs. Tell them the really good rules closing registration loopholes won't matter so much if there aren't any US forex businesses left to register.
I'd like as many FPA members as possible to write in. Please share what you wrote in this thread. It may give other members ideas about what to write.
Don't copy other letters, but go ahead and use them for ideas to help you write your own.
Steve L emailed me a copy of what he just sent to the CFTC...
Quote:
Hello,
I am very concerned about the proposal to increase the margin requirements for Retail Forex, for more than one reason.
First, on the personal level, I have been training for a year to be a trader. I am about to launch my trading business as a corporation.
A new regulation like this would severely limit my ability to grow my trading account.
I am 60 years old, my retirement savings are not going to last a lifetime.
Yet, now after this year of intense study and training I am confident I know how to manage the realities of leverage and loss control. I am confident I can do this and do well.
What alternatives do I have? Even though I am smart and technically skilled, no one is going to hire me at my age.
And, I am not alone...there are likely hundreds of thousands like me in my age group with no employment future....and probably millions of younger Americans who will be unemployed or underemployed for a long time. The jobs shipped to India (tech jobs) or China (manufacturing) are not going to come back.
In response to this, many, many US Citizens are learning to trade. Some are going to do well, if you don't change the regulations. There is an infrastructure being built out now in the educational and brokerage firms, and even the banks, that are preparing to serve this new demand. Please take a look at this. It is not small.
Those people who are suited for the career of trading, allowing themselves to become well prepared, practiced, and trained, will have self created jobs, they will be paying local taxes, and Federal taxes. They won't need unemployment, and they have money to spend in their local economies. Not only that, they can work from home, creating less demand for oil, and less traffic.
(Not everyone will have an aptitude for this work...but many will.)
The use of leverage in the Forex retail market is a beneficial thing to a person with the right skills to use it. It is not like giving a mortgage to someone who has no money. And, it is not the same as the leverage created by the Investment Banks that caused the financial system to almost collapse. It is not the same dynamic, and its scope is very small. Please don't make the mistake of seeing all leverage as evil. The leverage in the Forex market, if used wisely, allows a well trained individual to create an income for himself, and his family, without relying on the external job market, and without the need to have a million dollars to invest.
BUT, beyond that...there is now an infrastructure being built in the US to serve the retail Forex trader. If you implement the higher margin requirements, first this infrastructure and all the jobs that it is creating, is about to create, and will be creating, and all the tax revenue that goes with the business income, and those jobs, is going to disappear. It will never form.
Instead it will grow outside your jurisdiction. You will be giving all the transaction business to London or Switzerland, or even in the future, to Hong Kong or Singapore. Or Australia or New Zealand....I'm sure they would love to have the business. The only limitation is how they can access the fastest internet backbones.
There are already very good, highly regulated Swiss Forex brokers, more than willing to accept the US customers you would be pushing away. The same for London.
(By the way, London probably has more Forex transactions than the USA in any given day. The US is the second market.)
If the US Forex Retail Trader moves his accounts to London or Zurich, that in turn would force US Retail Forex Brokers, if they wanted to stay in business, to move offshore outside your regulation, taking the jobs with them, and the payroll tax revenue, if not more.
You have a tremendous opportunity here to allow the formation of a new industry in the United States....one where well trained individuals (i.e. "taxpayers") can participate in the truly massive and dynamic world's currency markets, having equal access as the worlds largest banks. This type of access is relatively new...with a new type of Retail Forex Broker building out the infrastructure and creating a base for secure and integrous transactions required by the Forex trader.
Really, I cannot see any positive outcome for our country, if these regulations are implemented.
Actually I would suggest the opposite....keep the margin requirements as they are, and institute college level trainings for a person to enter the self-employed trading profession, so, if they are capable, can compete against the giants with success. The tax system and local economies will thank you.
Thank you.
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Assistant Undersecretary for Moderation
Everything in excess! To enjoy the flavor of life, take big bites. Moderation is for monks!
- Robert A. Heinlein
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Over-regulation stiffles business and the rules you brought in last year drove thousands of American investers to use offshore companies at the expense of American Forex Dealers. Your new regulation of 10:1 leverage will exacerbate this. The consequences will be a loss of jobs to Americans and a deterioration of the American way of life.
America is already suffering from a massive increase in Government, Government spending and Government regulation and is now well on it's way to becoming a communist state. Your new regulations will only speed this process up.
The voting public of Massechusetts yesterday clearly indicate that "We the People" have lost confidence in the present Government and your new regulations will only add to this by further eroding their "Freedom of choice".
One can only conclude that you are sociopaths, pathological narcissists, control freaks or complete idiots and the consequence of your present Government's actions and over-regulation will eventually drive states leaving the union or another American revolution. Ultimately, you are cutting your own throats at the expense of the public and driving money out of the USA.
I have been advising my American Forex trader friends to leave the country and settle elsewhere since 20 January 2009. Those with the funds to do so are already leaving because the future for America is becoming bleaker by the moment.
Extract from CFTC proposed regulation:
"leverage in retail forex customer accounts would be subject to a 10-to-1 limitation,"
As a retail forex trader, I find the above proposal extremely intrusive and unnecessary. 2 things came to my mind when I read the proposal.
1) Kill retail forex market = Protect US futures market
Please don't insult the intelligence of the retail investor community by denying the above. I sincerely hope the US will not adopt this high-handed attitude in dealing with other international trade issues. A better alternative would be to boost both markets through regulations which truly protect all types of investors. Perhaps both markets could offer different trading terms and conditions to cater to different types of investors.
2) Tremendous increase in risk to the retail investor
Under your proposal, 90% of retail forex investors would be eliminated immediately. The remaining 10% more highly-capitalised investors would have to greatly increase the funding of their trading accounts. This would expose them to higher risk of massive losses. As everyone knows, the greatest bane of retail forex is the predatory nature of forex brokers, and occasionally, their tendency to disappear/fail together with the customers' funds, irregardless of whether they are regulated by NFA, CFTC or whatnot.
I am sure your proposal will attact great interest from the forex community. Please take our feedback seriously, afterall, your purpose is to serve us, and not to sever us.
Some parts are fine but only the parts that protect US retail investors. This bill will have the effect of driving out of business many good medium and small brokers. Also changing the leverage to a 10 to 1 limit will put most small investors out of business or move their money out of the country. It is clear to me the persons who put this proposal together do not have a clue about trading. I can only imagine how many US jobs will be lost this. At a time when it very hard to find a job, trading is one of those businesses that one can start up with without alot of capital. I for one cannot get a "regular" job and this line of work allows me to have my own business. Please do not take it away from me with ill thought out restrictions. We may need protection from some bad brokers but we do not need you to protect us from ourselves.
Att´n to Mr. David Stawick, Secretary Commodity
Futures Trading Commision 1155 21st Street, N.W.,
Washington, DC 20581
Dear Sir,
my name is Jaime Toscano. I am Mexican and live in my countrhy or origin.
I have several Forex accounts in various countries around the world, including the United Kindgon, Switzerland, Cypruss, Panama and the United States of America.
The account I have in the U.S.A. is held by IBFX (Interbank FX), acct# XXXXXXX in ase you wish to verify it)
I have learned that it is the FTC´s intention to change the maximum leverage for Forex Retail Services to 10:1 and it is for this reason that I am sending this message.
My trading strategy requires a leverage of at least 100:1, which means that if this initiative gets approved I will no longer be able to trade using the same strategy with IBFX, and I will move my funds to another country. I assume many traders will do the same thing if the initiative becomes law, with the subsequent impacts on the economy and the creation of jobs within the U.S.
I want to thank you in advance for the attention paid to this messge.
Please feel free to contact me if you have any questions or comments.
Best Regards,
Jaime Toscano
My phone number: +XX XX XXXX XXXX (office phone, daytime only)
Mr. David Stawick, Secretary Commodity
Futures Trading Commision 1155 21st Street, N.W.,
Washington, DC 20581
Dear Mr. Stawick,
The proposal to limit leverage to 10:1 is regulatory overkill and a better solution is to have any retail customer submit a written confirmation document stating they have read the CFTC/NFA literature describing the mechanics and risks of forex to the forex broker opening an account.
Regulation needs to eliminate the unscrupulous brokers and let the people grow up by taking the necessary risks without criminal interference.
This regulation will not control but rather supress the level of democratic fiscal activity in a market with so much potential to educate and support many citizens of the world.
It is risk that creates wealth to the extent we all find necessary to live a self-sufficient life.
My email and the response I received. -
01-22-2010, 10:59 PM
Your submission has been received by the Commodity Futures Trading Commission. Please be advised that this acknowledgement does not constitute either Commission approval of the subject proposal or a determination that the proposal is consistent with the Act and the regulations thereunder.
From: Raymond [mailto:raymond.kossa@gmail.com]
Sent: Friday, January 15, 2010 7:23 PM
To: secretary
Subject: Regulation of Retail Forex
Please add my voice to the chorus of those saying "NO" to the proposed new leverage requirements. 10 to 1 in insufficient for any type profit except for those with extemely large pocket books.
I am aware of such changes , many firms in US do not allow leverage
greater than 1 / 100 , let me put this way even if accounts move out from US firms to others , think about it how the market looks like on a day off in the US , holiday , Market is very very slow , Guess large accounts will be players , others will follow.
On the other hand many hedgers screwed up financial markets big times and in fact we all pay now , this is the painful fact
CALL TO ACTION: CFTC 10:1 - Share what you wrote here -
01-22-2010, 05:17 PM
01-22-2010, 09:31 PM
01-22-2010, 10:35 PM
My email and the response I received. -
01-22-2010, 10:59 PM
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