Proposed NFA Capital Requirement - page 60

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Danger: Your Margin Requirement is about to Skyrocket

The CFTC is in the final stages of imposing a 10:1 leverage limit on retail Forex transactions (see the CFTC press release). What it means is you will have to put up $10,000 to $15,000 margin to trade one standard lot (100,000 currency units), instead of $1000 to $1500 now, at 100:1.

While the CFTC regulation only applies to US-based Forex dealers, the equivalent regulatory bodies in Switzerland, the UK and other countries often play monkey-see-monkey-do and follow suit. Even if they don't, Forex dealers outside the US will be inclined to start raising their margin requirement on their own, as they could go down to 10:1 leverage without scaring away any of their clients back to the US. The point: this is going to affect you, no matter who you have your account with.

Fortunately, all is not lost. The CFTC proposed regulations are in the public comment phase now, until March 14. We can stop this, but it is going to take a massive public outcry against the 10:1 leverage limit. It means you must become actively involved. If you just sit back and wait for someone else to do something, this is just going to roll right on over us.

What can you do? Here are five things, and you might think of additional ones.

  1. Write to the CFTC in response to their request for public comment. The email address is secretary@cftc.gov, and your subject line must be "Regulation of Retail Forex". Additional ways of submitting public comment are described on page 2 of this document. Be polite and professional. Tell them you are opposed to the 10:1 leverage limit on Forex transactions. You can explain why. Do this whether you are based in the US or not.
  2. Inform your Forex trading friends and get them to write too.
  3. Post this message to other forums. Copy it word for word if you like. Ask the moderator to make the message a sticky and to get the word out to members.
  4. If you are based in the US, write or call your congressman/woman. Make them aware of what is going down and ask for their help.
  5. Send this message to your US-based broker. Ask them to send it to all their Forex clients and demo accounts.

Your Forex trading business, your livelihood, your dreams of making it big are at stake. Don't just do nothing!

 
 
Interbank FX:
Hi Guys,

As many of you are aware, the CFTC published proposed rules for the retail Forex market on January 13, 2010. These rules relate to the final proposal from the CFTC relating to the FARM Bill that passed in 2008, and would limit leverage that US firms are able to offer customers to 10:1, among other things.

Interbank FX has joined forces with other FDM’s to speak with one voice, working diligently to lobby against the passing of these rules. As we fight for fairness in Congress and with the CFTC, we’d like to encourage you to submit their comments directly to those agencies as well.

We invite you to voice your concern for or against the proposal. Contact the CFTC by sending an email to secretary@cftc.gov with "Regulation of Retail Forex" in the subject line.

Keep checking our Interbank FX web site for updates, and also keep your eye out on word from the Forex Dealer Coalition—the coalition formed by all US FDM’s.

Thanks! Hope you'll join us .

Abigail~ (Interbank FX PR/social media)

I'm Fully 100% support for the Alliances, i've done sending the email to CFTC.

You guys whatever and whenever you are if you connected in US forex Industry, please TAKE THIS Seriously, as the "AXIS" (NFA / CFTC) want to war, we give it HELL before our dead body!!! (sorry for language)

Forex Industry is complicated industry, it's connected with your other source industry like Food, Beverage, Electronic that involved with other country in manner of EXPORT & IMPORT that require MONEY EXCHANGE (FOREX).

You don't want your money CONTROLLED by the godfathers behind NFA & CFTC, these guys are ghosts hidding for controlling your Industry via the GOvernment body itself!

Many asset of the Brokerage Forex Industry will collapse for high cost cause the mass medium / small player are swoop away, many unemployment happens, Pair rate will run mass Crazily in your Metatrader, speculation spectaculary increasing by sum of large mass of number in offshore broker, your country profit via tax or fee from this Industry Decreased almost 80%, money subsidy gained from FOREX for other Industry or sub industry from other business related will crushed, then your Congress will put the anger to the CFTC / NFA cause their Dumbass idiot regulation have issued so far...

USA will never the American dream again, offshore brokers is viewed like more "heavenly" then USA, The other yard is more SAFE HEAVEN then the Home yard itself

thus will make the Enormous high barrier for other who want to enter the industry.

 

Well,

Before write just because "somebody told me" or "I hear about this".

I strongly suggest to take a read to the full document.

I do not agree with leverage limitation. Specially because futures allows 20:1 leverage.

Forex could allow 50:1 as maximum. Which a "common sense" leverage.

However, we need to understand the full picture and not only broker's words.

Forex: Still an non centralized market. So, Brokers should made and arragement and provided equal quotes before regulations fall over them.

$576 million in civil monetary penalties. An overwhelming majority of these cases have involved solicitation fraud.

Plus. the Justice system overload (lawyers will be happy)

Anyway, if this new regulation is approved you can still trade currencies on CME.

The latest worldwide slowdown had origin on leveraged products.

The latest worldwide big bankruptcies had origin on bad management and overexposed risk with leveraged products.

However, the paper have several mistakes and brokers does not say anything about.

First, there is no mention about micro lots. Which fortunately will die with new regulation.

Second, there is no mention to the "infamous" fifth digit. Another broker's smart creation.

This "Alliance" could easy make an arrangement with the authorities and set leverage to 50:1 and restrict other practices.

Last.

This "Alliance" says people will move accounts outside US looking for higher leverage. Maybe yes.

However, the main problem, that this regulation or any other can't prevent is people attitude.

People will keep looking for 400:1 just for cry a couple of hours later.

People will keep jumping into trading without the homework just for cry a couple of hours later.

People will keep thinking with the shoes just for cry a couple of hours later.

Maybe, litigation due to unfair practices or scam can be prevented, yes. But will increment the work for the State Department and collapse embassies

Regards.

 

or,

I have figure out some thinking,

It's just the number, isn't it ?

if you broke down to 10:1 it may have open the opportunities for many fragmented sum of money, just think with brokers way...

you may have :

1. Standard contract (100.000 dollar per lot)

2. Mini Contract (10.000 dollar per lot)

3. Micro Contract (1000 dollar per lot)

4. Nano Contract ( 100 Dolar per lot)

5. Sub nano or whatever ( 50, 30, 20, 10 dollar per lot)

JUST OUTSMART the CFTC & NFA, make sub standard contract

@LINUXER, you right, but in additions i think like this : Wherever and Whenever the Demand exist, there is the Supply (Demand & Supply LAW)

 

CFTC: Don't Get Mad... Take ACTION!

CFTC: Don't get mad... take ACTION!

Emergency online town hall meeting today at 14:00 GMT to plan organized resistance:

http://blogs.fxstreet.com/francesc/2010/01/20/live-coverage-open-discussion-about-the-cftc-101-leverage-proposal/

Information on how to submit your formal complaint to the CFTC:

http://fx-knight.com/smForum/index.php?topic=1027.msg5068#msg5068

The full text of the CFTC proposal (much more in there than just 10:1):

http://www.cftc.gov/idc/groups/public/@newsroom/documents/file/forexrulesproposal.pdf

Public comments received so far:

http://www.cftc.gov/lawandregulation/federalregister/federalregistercomments/2010/10-001.html

On-going updates & discussion:

http://blogs.fxstreet.com/francesc/2010/01/19/andrei-pehar-accusses-futures-brokers-to-be-behind-cftc-101-leverage-proposal/

 
 

How can we create a wealth and prosperness if we've been tightened with such a fool terms and regulations ?

here is the link from CFTC that approve the email come to them for commenting their foolish <fragmentinstance id="fragment2" fragmentid="cftcCSS" library="s

I just concern the HEDGE and LEVERAGE not DISCRIMINATING ANY TRADER / INVESTOR whomever they are in the world

 

Hey

you wanna play you got to pay

 

To be perfectly BLUNT........EVERY member of this site NEEDS to send a letter or email expressing their displeasure with these proposed changes.

The failure to do so could have the net effect of making YOU part of the silent majority; which if there is one, may be what allows this crazy overreaction to occur.

We all need make time over this weekend to put something in writing, no matter how short or to the point, expressing your displeasure.

As the old saying goes; "Those who do not vote lose the right to complain about the results."

Don't let this regulation pass and thus make your access to these markets all the more difficult.

For those with literary deficiencies, a small letter is better than nothing......should not take more than 5 minutes.....5 minutes to try and prevent something which could make most of our trading much more difficult and much less lucrative.

(Dismounts soapbox....)

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