Dear Traders:
On January 13, an announcement was made on the CFTC website detailing proposed regulations for retail forex transactions. CFTC Seeks Public Comment on Proposed Regulations Regarding Retail FOREX Transactions
Amongst the proposed changes was a requirement on the maximum leverage amount a broker could offer. The CFTC proposal states that: Leverage in retail forex customer accounts would be subject to a 10-to-1 limitation.
While we are in favor of tighter regulation to protect traders and improve oversight of the industry, FXCM is opposed to the 10:1 leverage proposal and is actively lobbying against it.
If you would like to voice your concern for or against the proposal you can submit your comment to the CFTC by sending an email to
secretary@cftc.gov with “
Regulation of Retail Forex” in the subject line. You must provide your address and contact information in the email in order for it to be considered by the CFTC. Also, you should be aware that the CFTC has the right to publish your comments, and will publish your email on a public page on their website. The deadline for comments is March 13, 2010.
Here is how the reduction in leverage to 10:1 would affect the amount of margin in USD you are required to set aside for a 10k mini lot position in one of the 4 major currency pairs:
Current Margin Requirement in USD:
EUR/USD: $160
USD/JPY: $100
GBP/USD: $180
USD/CHF: $100
Margin Requirement at 10:1 leverage
EUR/USD: $1,600
USD/JPY: $1,000
GBP/USD: $1,800
USD/CHF: $1,000
The proposed regulation, if implemented, would only affect FXCM LLC accounts. US traders with an account at FXCM UK will be unaffected by the proposal as well. FXCM is a global Forex firm with regulated entities in multiple countries. FXCM traders have the option at any time to open accounts with FXCM regulated entities in addition to the U.S. such as FXCM UK, FXCM Asia, or FXCM Australia, which provide flexible leverage levels.
FXCM and 8 other forex leading US forex brokers will be voicing opposition to the proposal through the Forex Dealers Coalition (FXDC). You can read the
http://blogs.fxstreet.com/francesc/f...ss_summary.pdf .
