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[habu]

Here is the message I got from Interbankfx regarding the upcoming rule change:
Dear Valued Customer,

As many of you are aware, the U.S. Commodity Futures Trading Commission (CFTC) announced on January 13, 2010 that it is seeking public comment on proposed regulations concerning retail Forex trading.

As part of the proposed regulations, it is stated: "leverage in retail forex customer accounts would be subject to a 10-to-1 limitation," which means 10:1 leverage would be the maximum amount allowed for all Forex traders in the U.S.

An example of how the proposed regulatory restrictions would affect a major currency pair appears below:
Maximum Leverage under Current Regulations Maximum Leverage under Proposed CFTC Changes
USD/CHF USD/CHF
100:1 leverage (one percent) 10:1 leverage (10 percent)
1 lot (100,000) 1 lot (100,000)
Margin requirement: $1,000 Margin requirement: $10,000

We stand behind the belief that you should be given the freedom and right to choose the amount of leverage that is appropriate for your individual desired risk, and that this basic principle of 'choice' is in jeopardy by the proposed CFTC regulations.

If you feel strongly about the proposal, we encourage you to help determine the outcome of these proposed regulations. You can help make an impact by sending comments directly to the CFTC at: secretary@cftc.gov.

Please include 'Regulation of Retail Forex' in the subject line of your message and the identification number RIN 3038-AC61 in the body of the message.

You can also submit your comments by any of the following methods (include above ID number):

* Fax: (202) 418-5521
* Mail: David Stawick, Secretary Commodity
Futures Trading Commision 1155 21st Street, N.W.,
Washington, DC 20581
* Courier: Use the same as mail above.

In the upcoming days, Interbank FX and the rest of the U.S. Forex Dealer Coalition will be releasing a more formal opinion about the proposed changes. Please feel free to read further details about the regulation on the CFTC website by clicking here. In the interim, we encourage you to voice your opinions to the CFTC and your local U.S. representative.

As always, we want the best for our traders. We hope you’ll join forces with us to prohibit the proposed leverage requirements.

The Interbank FX Team

[jhmalnowski]

FOREX.com

Dear Customer,

The U.S. Commodity Futures Trading Commission (CFTC) announced on January 13, 2010 that it is seeking public comment on proposed regulations concerning retail forex trading.

As part of the proposed regulations, "leverage in retail forex customer accounts would be subject to a 10-to-1 limitation," which means 10:1 leverage would be the maximum amount allowed for forex traders in the U.S.

HOW WOULD THE PROPOSED CHANGE AFFECT YOU?

Max leverage under current regulations Max leverage under proposed changes
USD/JPY USD/JPY
100:1 leverage (one percent) 10:1 leverage (10 percent)
1 lot (100,000) 1 lot (100,000)
Margin requirement: $1,000 Margin requirement: $10,000

We believe that all traders should have the right to choose the amount of leverage that is appropriate for his/her risk appetite, and that this basic principle of 'choice' is being threatened by the proposed CFTC regulations.

Should you feel strongly about the proposal, there is still time for you to help determine the outcome of these proposed regulations. You can make an impact by sending comments directly to the CFTC at: secretary@cftc.gov.

Please include 'Regulation of Retail Forex' in the subject line of your message and the identification number
RIN 3038-AC61 in the body of the message.

You can also submit your comments by any of the following methods (include above ID number):

* Fax: (202) 418-5521
* Mail: David Stawick, Secretary
Commodity Futures Trading Commission
1155 21st Street, N.W.,
Washington, DC 20581
* Courier: Use the same as mail above.

In the next few days, FOREX.com and the rest of the U.S. forex industry will be releasing a more formal opinion about the proposed changes. If you wish, you can read further details about the regulation on the CFTC website by clicking here.

In the meantime, we encourage you to voice your opinions to the CFTC and your local U.S. representative.

As always, we thank you for your business.

Customer support seven days a week
24 hours a day from 10am Sunday to 5pm Friday
Saturday from 9am-5pm ET Toll-free: 1.877.FOREXGO (877.367.3946)
Int'l: 1.908.731.0750
Email: support@forex.com


You are receiving this email because you have a FOREX.com account. If you do not wish to receive future emails from FOREX.com, please click here.

Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analysis, prices or other information contained does not constitute investment advice.

FOREX.com is a division of GAIN Capital Group, a registered Futures Commission Merchant (FCM) and member of the National Futures Association (NFA ID #0339826), and regulated by the CFTC. FOREX.com, 44 Wall Street, New York, NY 10005.

Copyright ©2010 FOREX.com. All Rights Reserved.

[Ricex]

Here is the statement issued by the Foreign Exchange Dealers Coalition (FXDC) . The coalition consists of FXCM, GFT, Oanda, IBFX, Gain Capital, FX Solutions, FXDD, PFG Best, and CMS Forex, and this is their response to the proposals on behalf of the industry.

Over the past decade the domestic retail foreign exchange industry has enjoyed a tremendous growth spurt and its prospects going forward are more promising than perhaps in any other sector of financial services. However, the CFTC’s recent rule proposal, which would limit customer trading leverage to 10 to 1, would be a crippling blow to the industry and drive it offshore into the hands of foreign competitors. Even worse, it would encourage fraud both at home and abroad as customers seeking to trade retail forex would have no other legitimate domestic alternative.

• Today the U.S. retail forex industry can boast hundreds of thousands of live accounts. Should the 10 to 1 leverage rule be adopted 90% of those accounts can be expected to go offshore. And the first place they’ll go is to the United Kingdom where customers can trade with leverage as high as
200 to 1.

• The U.S. retail forex industry (forex dealers and introducing brokers) employs thousands of people. The vast majority of these jobs are high paying, white collar jobs that require advanced education and range from software developers to accountants to foreign exchange dealers. The
industry is just as much a high tech industry as it is a financial services industry.

• The domestic industry’s revenue is well over $1 billion. This revenue is money generated from a product that is in many ways an export. Furthermore, as capital markets open in the BRIC countries the number of new accounts that will flow out of places like China and India will lead to huge job and revenue gains in the United States. Trillions of dollars of trade volume are at stake. This is money that could (and should) be booked in the United States as taxable revenue. But if this rule passes the United States could well be costing itself billions of dollars in taxes down the road.

• The problem of Forex fraud will get worse absent legitimate dealers offering retail forex. Retail forex fraud is not something that is caused by the actions of retail forex dealers; rather it is caused by unlicensed con-men who masquerade as forex experts promising silly and unjustifiable returns
before disappearing with customer funds. That is why the FXDC fully supports the CFTC’s rule requiring all introducing brokers be licensed. That rule will solve forex fraud, not 10 to 1 leverage.

• The 10 to 1 leverage rule will be highly unpopular with traders. The fact is 100 to 1 leverage is very popular with the retail forex trading public. They simply will not accept 10 to 1 leverage.

• Unregulated dealers from around the world will also be the beneficiaries of the 10 to 1 leverage rule. These unregulated forex dealers don’t have to worry about capital requirements, risk management models, marketing ethics, dealing practices or even returning a customer’s funds. These dealers will be out of the reach of the CFTC and they will thrive. The case against the 10 to 1 leverage rule is clear. The rule will be a boon to foreign forex dealers (both regulated and unregulated) who will grow entirely at the expense of retail forex dealers in the United States. Thousands of high paying jobs will be lost and the potential for tens of thousands of more jobs
will forever vanish as well. Consumers will be hurt and more vulnerable to fraud. And the United States will toss away one of the most promising export industries that it has, all in the midst of 10% unemployment. There is no good reason that this should be so.

[West Coast Pips]

This is what I sent FXCM over the weekend:

Dear FXCM

As a gold client of FXCM UK, please can you comment on the CFTC's new proposed regulations. I refer to the information on this page: If the CFTC does this, say goodbye to retail forex in the USA , in particular the section under 'And now, the worst part.'

What concerns me is that the CFTC would like the leverage for US brokers become a maximum of 10:1. This has major implications for US Retail Forex in diverse ways.

1. Does FXCM US support the proposed leverage change by the CFTC?
2. If indeed this new rule is passed do you foresee brokers in countries outside of the US adopting this stance?
3. Would this in any way affect FXCM UK?

Thank you

This is the reply I got:

Andrew,

Thank you for contacting FXCM regarding the new CFTC proposed regulations for retail Forex transactions.

FXCM is opposed to the proposal that would restrict available leverage to 10:1 even for the most widely traded currency pairs and will be actively lobbying against it.

If you would like to voice your concern for or against the proposal you can contact the CFTC by sending an email to secretary@cftc.gov with “Regulation of Retail Forex” in the subject line.

Public comments regarding the CFTC rule proposal will be posted at the following link:

AsstModerator

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