New CFTC margin limit proposal in US 10:1

[geekguy]

=-=-=-=-=- Comments from another message board -=-=-=-
Dear Lawrence,
Asaf also commented on "required to house $1000 in the margin in order to trade 1 single mini"
"Everyone is focused on the 10:1 leverage and are missing the big change:

"Subject to certain exceptions (e.g., for certain regulated financial intermediaries not under the Commission ’s jurisdiction as established in the CRA), the Proposal would require persons offering to be or acting as counterparties to retail forex transactions but not primarily or substantially engaged in the exchange traded futures business, to register as retail foreign exchange dealers (“RFEDs”) with the CFTC. Registered futures commission merchants (“FCMs”) that are “primarily or substantially” (as defined in the Proposal) engaged in the activities set forth in the Act’s definition of an FCM would be permitted to engage in retail forex transactions without also registering as RFEDs."

This means that if a foreign broker wants to offer trading services to US customer he needs to be registered by the CFTC which means it needs to comply to the rest of the restrictions - so if you were thinking - "I will just open an account with a Foreign broker ..." Think again because these brokers will not accept US customers after this bill has passed.

-- Asaf."
Click here to see more.
Happy trading,
The Currensee Team
-=-=-=-- End comments from another message board -=-=-=-=

This is an insane world

[PipCop]

What? That is fucking psychotic.

[geekguy]

I completely agree

[gross77777]

Geekguy`s post needs to be on every message board related to Forex to get everyone involved,otherwise there will be no Forex for US citizens.

[frito]

Originally Posted by gross77777

Geekguy`s post needs to be on every message board related to Forex to get everyone involved,otherwise there will be no Forex for US citizens.

if this goes through the US forex brokers that want to survive will move outside the US...
will hurt US as any other decision past 10ys, good for the US and god bless

[dennerle]

for those who worried that FSA will follow USA's CFTC or NFA ruling, it would be glad to know that it is unlikely

For more information you can visit FSA webite http://www.fsa.gov.uk/ and refer to the FSA's aims and objectives:


The FSA has set out its aims under three broad headings:

• promoting efficient orderly and fair markets;
• helping retail consumers achieve a fair deal; and
• improving our business capability and effectiveness

Over here, you can refer more in-depth on these details and highly FSA will not follow what CFTC or NFA are doing...



Do let us know your views about FSA whether they will follow NFA /CFTC footsteps for discussion too

[Jason Rogers]

Originally Posted by pipdetector

At this moment this is just a proposal, I think that we need to spread the word so that it does not get passed. Personally, as a foreigner I guess I cannot influence CFTC, but US citizens may have something to say.

While you may not be a US citizen, you as a trader and a potential source of economic revenue for a US based brokers have an important voice as well. If non-US traders move their accounts out of the US, it will have a large economic impact which cannot be ignored.

[Jason Rogers]

As a general disclaimer, I work for FXCM as an ambassador to online communities. What brought my attention was the post PipCop made about contacting the CFTC if you want to voice your opinion on the proposal.

It is very important to contact the CFTC if you feel strongly about the proposal to reduce leverage to 10 to 1 and want to voice your comments.

While FXCM and the forex industry are in favor of regulations to promote a safer trading environment and eliminate fraud, we are against the proposal limiting leverage to 10 to 1 and are actively lobbying against it. We believe the reduction in leverage will cause traders to move their accounts offshore where the CFTC and NFA have zero oversight continuing to leave traders are risk.

The Forex Dealers Coalition opposing the proposal is made up of FXCM, GFT, Oanda, IBFX, Gain Capital, FX Solutions, FXDD, PFG Best and CMS Forex.

If you have additional questions, FXStreet.com is hosting an open chat discussion on Thursday January 20th at 9:00EST to discuss and answer questions about the CFTC proposal and its impact on forex traders and the forex market. I will be joining the discussion group along with James Bibbings of Turnkey Trading Partners and Joseph Trevisani of FX Solutions.

Again, if you have any comments about the proposal, please email the CFTC according to the instructions provided by PipCop.

Jason

[Jason Rogers]

Originally Posted by dennerle

for those who worried that FSA will follow USA's CFTC or NFA ruling, it would be glad to know that it is unlikely

For more information you can visit FSA webite http://www.fsa.gov.uk/ and refer to the FSA's aims and objectives:


The FSA has set out its aims under three broad headings:

• promoting efficient orderly and fair markets;
• helping retail consumers achieve a fair deal; and
• improving our business capability and effectiveness

Over here, you can refer more in-depth on these details and highly FSA will not follow what CFTC or NFA are doing...



Do let us know your views about FSA whether they will follow NFA /CFTC footsteps for discussion too

Hi dennerle,

We find it unlikely that the FSA will adopt the same leverage reduction being proposed by the CFTC.

The CFTC has a rules based system setup and the rules are one size fits all. If you meet requirements on the checklist you can open a forex brokerage. $20 million in minimum capital, check! customer identification program, check! etc. The FSA operates differently in terms of how they create their rules. They take a closer look at each broker not only at the minimum amount of capital the company has but at the amount of capital they have even exceeding the basic amounts. They also look at the experience of management in the financial industry, how long the company has been operating, how long the systems have been running and reliability, etc. all in order to gauge what a broker is allowed to do or even if they will license the broker . Someone off the street without any previous experience in the financial industry could open a forex brokerage if they met the US guidelines; whereas, it would raise red flags with the FSA even if they had the capital requirement. So the mindset is much different in terms of their regulatory approach in what they allow each firm to do.

Hope that helps,

Jason

[PipCop]

Just an FYI - comments sent by traders like me & you are being posted on the CFTC's website. It does not look pretty, either!

http://www.cftc.gov/lawandregulation...10/10-001.html