CALL TO ACTION: CFTC 10:1 - Share what you wrote here

[jhmalnowski]

Dont forget to write you congressman and senators

Dear Senator Hutchison
(also sent to Senator Cornyn or Rep. Joe Barton)

I would like to express may concern over the proposed rule change being considered by the Commodity Futures Trading Commission that would decrease the Forex leverage allowance from 100:1 to 10:1. Because foreign currency values change in tenths and hundredths of a percent, this change in leverage would simply eliminate any benefit or incentive for individual investors to be involved in Forex trading.

While the change in regulation is supposedly being considered to protect uninformed investors; this rule change would have the unintended consequence of harming the same people.

As you are probably aware, Forex trading has become both a primary and secondary form of income for countless thousands of average Americans. Forex trading has been described by some as the "ultimate home business." The explosion of Forex trading in the US has lead to the formation of many brokerages, investment services and software developers to meet the needs of these investors and business people. These individual investors are also helping drive the economy of our country through the use of the aforementioned services are well as home office equipment, like computers, printers and high speed internet service.

The change in leverage that is being considered would jeopardize all of this with the stroke of a pen; leading many brokers to move their services out of the United States and to foreign countries where US investors would be in even more risk.

This of course, would lead many employed by the brokerages to lose their livelihoods as well; as more US jobs will be shipped overseas.

Those of us who are involved in the Forex market as investors understand the power of leverage; both for good and for harm. But, it is a risk that we are willing to endure for the potential profits that are available to us through the Forex.

I would like to ask if you would consider contacting the CFTC secretary David Stawick and tell them that you are aware of this proposed rule change and that your constituents are opposed to this change.

Sincerely, your name here

 

[Damir]

Dear Sirs,

I am a retail forex trader from Europe and I have been relying on a US forex broker services to my best satisfaction for some time now.

As of recently, I have heard that CFTC has plans to downsize (yes, this is probably the most appropriate word for it), the US retail forex leverage down to 10:1.

In few words, should this really happen, I and many other people I know who currently rely on US brokers are going to transfer our capital from BOA and other US banks and brokerages to European banks and brokerages which are far less convenient for trading but at least have no problems with 100:1 leverage.

With all due respect, it is my honest opinion as a forex trader that this regulation of yours can represent the final blow to the US retail forex, so if it is your aim to destroy this industry entirely in the US and have the capital transfered elsewhere then feel free to proceed with it. If on the other hand you do happen to care for the industry, then please, by all means, abandon this idea forever.

Trading is risky. All trading is risky. Those who don't understand and/or are not ready to assume this risk should not be trading and not you nor any other body should try to "protect" them against themselves at the expense of other traders.

Also, I would like to remind you that forex is the very least risky market. Exchanges can and do crash. Exchanges can and do open with huge gaps. Exchange traders can and do end up owing commodity and stock brokers more than they have in their accounts. Forex traders are immune to these risks. But then again, you already know this. Therefore, being well aware that you have already received tons of similar appeals I will have no other option but to judge your decision (again, should it take place) as malevolent and counter to common sense and financial interests of the United States.

Looking forward to your soon reaction and complete rejecting the 10:1 leverage related regulation.

Sincerely,

Damir Petkovic

 

[karimo39]

This is the killing of US brokers and retail traders

I have a forex account with IKON ROYAL in the US and I'd like to say that this new CFTC regulation will kill forex brokerage business as I guess that most US retail traders will open their accounts with european brokers so I guess that this move will backfire on the US economy after all.

 

[nqangel]

Message to CFTC

Hi:
I'm very concerned about the new proposal of lowering the leverage to 10:1 in retail forex because it will actually kill retail forex in the USA and will make us, the small, but well trained forex traders, transfer our accounts outside the USA. It will make us very difficult to operate under such conditions and even though I believe in the CFTC's good intention in this proposal it will actually mean the end of my "second job" in the USA, and will become "my second job" may be in Europe?
Thank you,
Nelson Quiroga

 

[bear4u]

Regulation of Retail Forex

Dear Sir or Madame:



Please; I would suggest and ask you… DO NOT IMPLEMENT THIS REGULATION. Here are some reasons why this would negatively impact some one like me:



1. I have been out of the regular corporate world (unemployed) for the past year and currently establishing my own currency trading business. It is my only source of income using the little savings that I have; if you increase the leverage requirements I may not be able to gain as much with the only working capital that I have, thus, forcing me to either establish an account in another country or make use of my “Dual citizenship” and move to another country all together.

2. I have spent time and education money preparing and training myself in order to responsibly use leverage to my advantage; if you modify the “Retail Market” leverage currently required, you would, once again, be giving more power to the big banks and institutions to gable up the little guy (very unfair – the government always helping the bigger guy (making the rich richer) instead of keeping the field leveled for a more fare competition.

3. As a government entity, you should promote access to the same “breaks” that big institutions have access to by allowing the same leverage for every trader that wishes to participate.

4. If you are truly and genuinely concerned about protecting the public against predatory institutions, then, why not make colleges and training schools offer “Financial and Self-Money-Management” or “Trading Courses” (or the equivalent) in order to better prepare us to use what the industry has to offer.

5. The jobs lost in last couple of years are never coming back, we as a nation need to break the notion that it is only thru “a job” the only way to make a living. Please DO NOT IMPOSE THE PROPOSED RETAIL MARKET REGULATIONS upon us…they would put us (in the USA) at a big disadvantage with other countries.


Respectfully,



Douglas A.
New Jersey, USA

 

[Jan K.]

Email sent to CFTC

First and foremost I want to emphasise the incredible work by Pharao and the rest of the FPA moderators and community and want to sincerely thank everyone in the FPA for getting in touch and criticizing the CFTC!

Of course I want to share the email I've sent the CFTC in regard to the devastating regulations in question with you.

That's the email I've sent the secretary of the CFTC:

Dear Sir or Madam

This email is written in regard to the new regulations of retail forex I realized.

First and foremost I want to state my concerns towards the new regulations of retail forex. I am undeniably severely critical of these new regulations and do not endorse them whatsoever!

I want to point out that I somewhat sympathize to the registration regulations to reduce the risk of beeing scamed by unethical and deceptive fx companies.
HOWEVER the remaining regulations don't make any sense in my opinion to express myself carefully!

Trading is a game of CALCULATED RISK with proper money management! I don't see any reason to decrease the leverage by limiting it to 10:1 (just to make sure I didn't mistype TEN to ONE). It does NOT secure a trader. As a matter of fact rather the opposite is the case! A trader has to risk 10 times the amount than using a leverage of 100:1.

PLEASE FEEL FREE to consider the vast impact these regulations will have on the American economy when American traders will be forced to select non-American brokers and banking institutions. Do not weaken your economy even more! It is hardly comprehensible and understandable what an amount of jobs will suffer subsequently. The forex market is a significant industry and especially the enterprises in America will be hard-pressed whereas America should actually be interested in creating new jobs even in the fx market by creating service orientated jobs offering traders superior and safe attendances rather than blasting them.

On the other hand the reasonable and very useful registration regulations which help to reduce dubious fx enterprises wouldn't have the appropriate effect since American brokerages would be used to a lesser extent anyway.

I am a sincere and genuine person beeing involved in the fx market and not only seriously ween but genuinely suggest you do NOT make the aforementioned change concerning the limitation of the leverage.

Thank you for you attention and taking time to read this statement.

Sincerely yours

Jan Kuehne



I once again want to thank the FPA for striving against these stupid regulations.

We are all in the same boat. So lets go up against this s*** together soldiers!

Best regards

Jan

 

[West Coast Pips]

Why change a good thing?

Hello CFTC

I am an active forex trader and am rather concerned, to say the least with future trading after reading the article on this page:
https://www.forexpeacearmy.com/fore...f-cftc-does-say-goodbye-retail-forex-usa.html

The part that really raises my eyebrows is the dialogue under 'And now, the worst part.' Even though I am actually a Canadian citizen and currently do not use any US forex brokers the CFTC's proposed maximum leverage change to 10:1 will certainly lead to catastrophic consequences initially in the US and then globally.

So you now determine that the proposed leverage change is there to protect the individual trader. This may be true to some extent though certainly does not bode well for the established and knowledgeable trader. I have been trading for 5 years now and would like to say that I am pretty professional at it now. I had to make a drastic shift in my career several years ago as a result of my poor health that rendered me only able to work from home. I was lucky enough 5 years ago to stumble across a seminar on forex. I was most fascinated by the magnitude of the forex market and how it could become my bread and butter. I invested all my effort into educating myself about forex and how I could commence trading. Several weeks after intense self education I opened an account with Refco with just $300. When I made my first trade I made sure I apply due diligence by risking the least amount of money possible. Sure, I could have been very aggressive and wager the maximum amount of money possible on my trade but I had sensible risk management and traded only 1 mini lot. If people want to blow their complete trading balance by being careless then let them go ahead. Do not persecute the traders that know what they are doing. Forex does carry risk and you should enter into it knowing this.

I lost money, I made money and my knowledge of forex and trading grew to the point where I did become slowly profitable. 5 years later I am the stage where I trade anywhere from 10-60 lots several times a week. I know the risks involved though I also know the rewards. It is imperative to my trading style that I have the highest leverage offered to me. I have brokers in the UK and Cyprus at the moment who offer me 200:1 - 400:1 leverage and is ideal for me. To introduce a maximum of 10:1 leverage in the US may well lead brokers in other countries to adopt the same stance.

If the US does adopt this leverage change it will most definitely wipe out the individual retail trader. I am sure it will have a profound impact on the big banks and other large scale trading entities. Doing this will lead to a huge drop in income for the US forex trader which will lead to less income for the US government. A domino effect has commenced and people in the US will take money out of the country to foreign providers. This will lead to job cuts in an already fragile US economy. How will the IRS then track foreign investments? Many foreign brokers are not regulated and you will be forcing the US forex trader in potentially perilous conditions.

The CFTC's decision to change leverage in such a drastic way can certainly lead to governments around the world adopting the same measures for their own forex brokers. This would most certainly mean an end to forex trading globally. Forex today enjoys more rewards than stock trading. Why cannibalise an industry that is already prosperous in so many ways? Why annihilate forex trading as we know it?

Thank you

 

[BlueMental]

Both CFTC and the NFA are regulatory groups with no power of actually upholding the law.
They are however in the proccess of laying the fundamental foundations for what will become law in the not too distant future.

How are they 'safeguarding' us the traders, by removing our liberties by erosion, one piece at a time. While the institutions that trade forex on a large scale are not having any of the same restrictions placed on them.

So in essence, us the small guys are being systematically imprisoned by regulations and guidlines supposedly to help us not fall for scamming brokers.

Instead of looking at the fact that it is legal to commit fraud as a broker in the United States (how many scam brokers have been to court let alone been arrested?) and alter the appropriate laws, regulatory groups are formed to 'help' the little guy.

It is no longer acceptable to place hedge trading, which has been a standard trading principal method of trading since 1800. Now the 'assistance' is to limit the lerverage allowed down to 10:1.

So in order to make a living from trading forex, one would need to be indepentantly wealthy to support the capital balance needed to trade and make enough profit to make any form of worthwhile income.

What next? To ensure that we are not money launderers involved in the war on terror, will they require our right eye as collateral to get a permit to trade?

" There will be in the next generation or so a pharmacological method of making people love their servitude and producing dictatorships without tears, so to speak. Producing a kind of painless concentration camp for entire societies so that people will in fact have their liberties taken away from them but will rather enjoy it, because they will be distracted from any desire to rebel - by propaganda, brainwashing, on brainwashing enhanced by pharmacological methods; and this seems to be the final revolution. "
-Aldous Huxley "The Final Revolution." 1959, speech at a symposium at a University of California medical school.

So when living in a country that allows and condones traffic cops to tazer citizens into submission for their own safety and can arrest anyone they choose without a trial or a charge on the grounds that the person may be a terrorist, or a regulatory group can impose guidelines that will end up making ones career of trading null and void, then one should actually start pondering the authenticity of the constitutional right of that country.


Or perhaps I should just take some Prozac and forget about it.
Blue Mental.

Here is my Email I sent:-

from Lance Blumenthal [TR=""]
to secretary@www.cftc.gov
date 24 January 2010 02:19
subject 10:1 (Ten to One - Leverage)
mailed-by gmail.com

hide details 02:19 (0 minutes ago)

To whom it may concern.

While both CFTC and NSA are regulatory boards that are intended to diminish the possibility of Fraudulent Brokers taking our individual money, the guidelines imposed upon the USA brokers in no way diminish the legality of the brokers and their actions.

Even if and when these guidelines become ratified as law, they still do not aid the individual trader.

For me to do intraday trading on GbPUsd, while simultaneously have a long term trade in action, the guidlines no longer allow hedge trading, which was established in 1800.

I need to have 2 separate accounts (assuming I wish to trade via US Brokers) to do this, meaning I need double the amount of capital I needed before the 'No Hedging' guideline was established, since I can not trade a long and short on the same currency pair at the same time in one account.

This increases my risk ratio and also if were to use a separate broker for the second account, also increases the risk of ending up with a fraudulent broker.

With regards to the limit on leverage, that now means for me to place the same trades I currently place, I need ten times more capital in each account to accomplish the same profit (or loss) so the risk ratio is actually increased.

While the banking institutions have no such limits regarding hedging or leverage.
If the broker uses hedging to counter losses of their clients, then that is a different concern that is wise to regulate against, but to the individual trader, hedging is a tool and not a crime.

The very fact that your State Laws allow brokers to commit fraud on a daily basis with no legistlation in place to secure a free and fair lawful service is no reason to limit the individual trader.

As traders, we are fully aware of the risks involved in Forex Trading, and we are not children in need of baby sitters to look after our business afairs.

It would be far more beneficial, both for the individual trader and also the US Economy for a clear look at how to alter the law regarding fraudulent brokers instead of punishing the trader for misdeeds they do not commit.

So if you constitute it as wise to get both Americans and any traders from other countries, to take their business to other countries that do not treat them as delinquents, then so be it. The US economy will fall into a deeper recession at the hands of the well intented guidlines.

A knife stabbed in a leg can not be healed by pain killers. The knife needs to be removed. So until the American Laws regarding fraud address the issue, all you intented guidelines are simply isolating USA into the last choice of taking ones business.

I officially object to the 10:1 (Ten To One) leverage proposal.
I officially object to restriction on Hedging.


Thank you for your attention,

Lance Blumenthal.

 

[DetroitSlice]

This is what I emailed to the CFTC
___________________________________________________________________________________________

Mr. David Stawick
Secretary Commodity Futures Trading Commission
1155 21st Street, N.W.
Washington, DC 20581

RE: RIN 3038-AC61 - Regulation of Retail Forex - Proposed Regulation 5.9

Dear Mr. Stawick:

I reviewed the Federal Register, released January 20, 2010, to gain further insight of proposed regulations that would impact individuals, like myself, trading with RFEDs and FCMs. I like the new regulations that would require all involved in providing broker/dealer services to be registered. I also like proposed sections that will provide customer protection from failing and unscrupulous firms. This protection will boost confidence in the industry.

On the other hand, I have a serious concern regarding Proposed Regulation 5.9(a) – Security Deposits for Retail Forex Transactions. As an individual, I invested in training classes to prepare myself for a part time and possibly a full time career in trading the currency markets. The risk/reward scenario for every trade is in constant play for me. As a trader, risk is constantly analyzed for all my trades. Having access to a greater leverage makes my investment in training classes worth the time and effort. If the security deposit requirement is increased, the time and thousands of dollars invested in those classes will virtually be lost.

Last week, President Obama gave a speech introducing proposed bank regulations struck a nerve for me. In paraphrasing, Obama said that banks were taking risks that eventually the American taxpayer would have to cover. If the investment was good, banks profited big, with cheap money. If the investment was bad, banks lost and tax payers would have to cover the losses. As an individual, I make an investment and if it was good, I profited. If I make a bad investment, I lose. The difference between myself and the banks is that I can’t ask the Federal Government to cover my losses.

I am thankful for the intention to protect individual customers like myself, but please do not increase the security deposit requirement as outlined in Proposed Regulation 5.9(a). As an individual trader, I fully understand the risks that I am exposed to. As a trader, the risk is always analyzed. For Proposed Regulation 5.9(b), may I suggest that it be written in such a way that “customers will not be held liable for trades that were not closed out at a zero balance”? This will encourage each RFED and FCM to incorporate procedures in their business process to ensure that losing positions are closed out to a zero balance. Mostly importantly it will effectively root out unscrupulous firms that look to take advantage of retail customers by not closing out losing positions.

Thanks for taking time to review my comments and suggestions regarding Proposed Regulation 5.9.

Sincerely,

 

[Gray]

Fight The Power!

Hi all, I sent this down the chain of the CFTC, I hope together, they will see the light and stop this madness before it starts.

To:secretary@www.cftc.gov
CC:dstawick@www.cftc.gov, tsmith@www.cftc.gov, jbauer@www.cftc.gov, wpenner@www.cftc.gov, ccummings@www.cftc.gov, psanchez@www.cftc.gov

ATTN:
Mr. David Stawick,
Secretary
Commodity Futures Trading Commision
1155 21st Street, N.W.,
Washington, DC 20581

FROM:
Walter Washington III


Mr. Secretary,

My name is Walter V. and it has come to my attention that a proposal being put forward by your regulatory organization: RIN 3038-AC61 will have a great and, most possibly detrimental, impact on the foreign currency market in the United States and I was compelled to put my views and perspective on said proposal and is most likely effects into words.

The proposal to change the minimum capital leverage of 10:1 will severely cripple if not destroy the average retail forex trader's ability to fund or operate an account due to the need to already have or somehow appropriate 10 times the current amount of capital to maintain the same trading volume. If such a proposal is enacted average forex traders will have no choice but to move their funds to non-US accounts of foreign brokers to continue trading at the current market parameters. This will facilitate if not accelerate the amount of liquid funds already hemorrhaging from the US financial system from foreign and domestic investors alike leaving the US markets in the wake of the recent financial crisis. The proposed changes will only add to the exodus of wealth and prosperity leaving our shores.

If this happens not only will you be driving out the heart of a viable market that works and has worked for the American people and the world as an alternate source of revenue and financial stability, but you will also be driving good and honest traders into the arms of some totally unregulated and questionable offshore forex brokers who will mostly likely, with a 'captive audience' so-to-speak, be unscrupulous in their dealings with American investors and take them for every dollar they have. That is money that could have stayed in the US market if only poorly constructed regulation had not driven them out and put all but the biggest and most-capitalized brokers out of business.

Regulation that strangles growth and stifles competition is not the answer to the financial woes of our great country. The true answer is judicious and carefully considered moderate regulation based on sound market principles that allow the risk necessary for growth while checking the fraudulent actions of dishonest players in the market, such as some brokers with predatory market tactics used to increase profits and scammers creating phony forex products and schemes. The number one component of any successful and fair regulation is EDUCATION. Educate the people on not just the rules and by-laws, but also on sleazy tactics that might be used against them.

You can't complain that people crash too much in traffic and then lower the speed limit to half of what it was in an attempt to prevent accidents if you never taught them to drive in the first place. In short: The proposed new rule of leverage limitations does not protect investors or traders. It will marginalize average retail traders into nothing. It will do exactly the opposite of protect them. It will drive force them into harm's way because an investor will now have to risk 10 times the amount as before to place the same trade or go into even riskier territory to make the same trade elsewhere. Please think about this before attempting to make this proposal law. In forbearance there is wisdom.

Sincerely,
Walter V.