5,500 comments on the new CFTC rules – that's it?!
fxstreet’s Francesc reported that CFTC has received 5,500 comments from brokers and traders. And all I can say is that
fxstreet’s Francesc reported that CFTC has received 5,500 comments from brokers and traders. And all I can say is that this is a massive disappointment. I expected US traders to actually act on this proposal and voice out their displeasure. I guess I was totally wrong. If only 5,500 traders out of several hundreds of thousands of US traders have responded so far this only means that traders don’t really care. This also adds to the fact that not all US brokers joined the Forex Dealers Coalition meaning that if the industry itself isn’t united then how can you expect CFTC to take the protest seriously?
FXstreet.com (Barcelona) – The market has massively reacted to the CFTC proposal rule to limit the leverage in the United States to 10:1 in Forex. Around 5550 letters have been sent to the CFTC official site by brokers and independent traders. Most of the messages are against the rule, Brokers have created the FXDC coalition and the traders, the TradersAlliance group.
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Since January 1st, The CFTC has received around 5550 letters from forex players. The week between January 18 and 24 was the most intense with almost 3000 messages, January 21 being the busiest day with almost 1000 comments.
The U.S Commodity Futures Trading Commission has refused to comment on its considerations about the proposed rule to limit leverage in US to 10:1. “The CFTC declined to comment”, according to a CFTC Spokesman, since the proposal is currently out for public comment until March 22.
I imagine there would be a lot more letters being sent in if several of the brokers weren’t pitching their ‘London loophole’ UK branch options to their US clients. There’s no telling if/when that loophole could be closed.
As to the US brokers that haven’t joined the FXDC, that’s indeed perplexing..
According to the CFTC?…the CFTC is probably publishing a false number, just to fool people into thinking that the retail US traders are ok with this deal….You need to always question information that comes from gov’t agencies, espcially when it is in their favor, not in ours, and they are the source of the info….5,500!!!!..please, these folks are lieing, again!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Mike
Your comments are a little out of context. 6,000 is actually quite a lot. The CFTC, unless they are utter and complete morons, can not ignore this outcry.
If I am not mistaken, 6,000 comments and counting is not only the most comments they have ever received about a rule proposal, it is the most comments the CFTC has EVER received about ANYTHING, EVER, since they were formed.
Also, you failed to mention that out of those approx 6,000 letters, every single one – LITERALLY EVERY SINGLE ONE – was against the 10:1 leverage limitation (our staff read through every one). Many were also against the proposal to cage Forex IBs to one single FX broker at any given time.
BOTTOM LINE: The amount of public outcry & outrage should be applauded, not derided.
0:5000 positive on the proposal and 5000:5000 apposing the proposal is a huge cry out.
What amount of responses would change their mind. If we knew that, we would bombard them with more responses than they wanted. What has changed their mind in the past? Nothing, Looks like a trend to me. Don’t bet against the trend.
The CFTC are regulators and they are not seeking our input or make choices with our interests in mind.
As to 1:30, is not a compromise. 1:100 is a compromise and the most offered in the industry.
They need to concentrate on fraud, and this is not fraud.
I think that 5500 comments provided they are against the proposed leverage is quite reasonable but the issue should be that is the CFTC really interested in the responses?if so,i think that 55000 responses and still counting is quite significant.
It is hurting retail business in US. as well as small traders who is out there to make extra money for them. CFTC SHOULD NOT ADOPT THIS PROPOSITION
Hi,
It is truelly amazing – most of those responses are ordinary folks- not sophisticated lawyers or industry insiders -that speaks volumes!! – when do you ever see such response to a proposed rule by a govenement agency who overlooks trillions of dollars in derivatives traded by sophisticated fanancial entities? – go check proposed rules by FERC and see if they get 5k responses for anything they write.
I must suggest you re-write this whole article, as you are desregardng the time spent by ordinary american stepping up for an industry which is being witched hunt by regulators.
They don’t have the traders best interest in mind. If they did, they would require segregated accounts instead of this lunacy. Remember, Gary Gensler used to be with Goldman Sachs…enough said
What the hack? 10:1 leverage??? You got to be kidding!!!
The most effective way would be to curb the excessive bonuses handed out in Wall Street.
I just wanted to post that Jason Rogers agrees – posted in forexfactory.com:
“7,000 comments is astounding. To show just how unprecedented these numbers are, last year the CFTC published some 17 rule proposals and the number of comments received for all 17 combined was only 220.
In 2007 and 2008, total comments for all CFTC register proposals totaled less than 250.
This year, the CFTC released a rule regarding energy speculation limits. That issue was given far more coverage by the media and yet only 22 people bothered to comment on those limits.
-Jason
__________________
FXCM Expo in Vegas May 3-4 2010”
Citing the email I sent to CFTC on this matter:
Dear Sirs,
I would like to hereby express my deep concern with the intentions of CFTC to limit the maximal leverage for retail Forex brokers from the current 1:100 to 1:10. In my opinion, the following scenario is likely in that event:
1. The maximal leverage reguirement will be increased for all US-regulated brokers from the current 1:100 to 1:10. This will clearly demonstrate a complete dismissal of a regular Forex trader’s interests if they happen to be conflicting with the interests of the “big wallets” – banks and non-retail futures brokers. We do not wish to be “protected” till we go broke just to make them even richer.
2. US-based retail Forex brokers will sure be unwilling to lose their business completely. They’ve already got burned with the recent self-imposed regulations of the NFA (which is not even a government agency, although many traders are made to believe it is) and now clearly realize the 1:10 leverage will be the last nail into their coffin. These retail brokers will therefore start moving their businesses to other countries and servicing US customers from there, successful examples of which already exist: Dukascopy in Switzerland (which has recently introduced MT4 in addition to their custom platform), ATCBrokers and FXCM in the UK, FXDD in Malta, FXPro in Cyprus etc.
3. The US government in response will do everything possible to prevent US traders from enjoying the benefits of being serviced in other countries by making overseas transactions to personal bank accounts even more controlled and restricted.
4. Those traders who make a living from their trading will then have no other choice but to set up offshore companies for themselves through the Internet (contrary to a popular belief, this doesn’t cost much – one can get an offshore company with an overseas bank account for as low as $1,500).
5. As all (or most) trading accounts will be on the companies’ names, the US government may heavily lose on the income tax they collect from US Forex traders. Thus, trying to harm the average Joe trader and make the banks and futures brokers richer at his expense, the government is harming themselves in the end.
Since recently, America (which I really love) has been turning from a land of opportunities to a land of restrictions. Very sad to see this, indeed.
Yours sincerely,
Jacob Beasley
So when exactly will they finalize the proposed regulation & inform us the outcome.
I just hope this wont drag for too long on courts with FXDC coalition against CFTC; be it good or bad. I just need to know this soonest possible.
hi All,
March 3, 2010:
“I am pleased that the CFTC Chairman acknowledged our concerns and appeared open to changes to the leverage requirement,” Boswell said. “The CFTC has received over 5,600 comments on the foreign exchange proposed rule and I am hopeful that this input will help the Commission to find a common ground that won’t chase business overseas, while still protecting consumer interests.”
U.S. Rep. Boswell: Chairs subcommittee hearing on Commodity Exchange Act in 2008 Farm Bill
3/3/2010