Forex Trading & CFTC RULE RIN 3038-AC61

FOREX TRADERS UNITE!
There is a new CFTC Rule in the works. It is a very bad call to the retail Forex Trader & market alike. You can view it here:
http://www.cftc.gov/newsroom/generalpressreleases/2010/pr5772-10.html
There is a Blog by a member of BABYPIPS.com & the following is a copy paste from that. Please read carefully:

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1. The new rules will require all RFEDs (Retail Foreign Exchange Dealers) and FCMs (Futures Commodity Merchants) in the US to register. Also, "Persons who solicit orders, exercise discretionary trading authority and operate pools with respect to retail forex would also be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators, or as associated persons of such entities."

    

   Basically, this means that in the US, all forex brokerages, forex account managers, investment pools trading forex, IBs to registered brokers, have to be registered. I think this is a great thing. It will help potential traders or investors weed out the potential scammers out there by giving them a chance to check out their registration number before giving them their hard earned money.

    

2. The next big change is that a minimum net capital requirement of at least $20 million, plus 5% of any amount of retail customer liabilities that exceed $10 million.

    

   Brokers who cannot meet or find the funds to meet this requirement will probably have to move offshore. If you are trading with one of these brokers, it's up to you if you want your money to move offshore with them or transfer your funds to a broker who can meet that criteria. Again, it's up to you where you put your money, but I would seriously consider asking how this will affect your ability to trade and the safety of your funds during transfer.

    

   To find out which camp you're in, please visit the CFTC's most recent financial data page for Futures Commission Merchants or contact your broker and ask them about the proposed changes.

    

3. Finally, the new rule change causing a ruckus across the forex industry is to set maximum leverage to 10:1 for retail forex traders in the US...

    

   Ok, I'm feeling a bit torn about this because I'm all about traders not over leveraging their positions, but I'm also about giving those traders who know how to control and manage risk the choice and ability to increase their position size if a trade goes their way.

    

   Also, if this rule does go into effect, it may hold back those new traders who have developed a profitable system and the discipline to manage risk, but have low starting capital, from getting their feet wet.

    

   In my opinion, this is a case of "over regulation," and that "education" for traders is a better solution so that the few who don't know what they're doing with leverage doesn't ruin it for the rest of us who do. The United States of America is the land of the free, where each forex trader should be able to make their own educated decisions about their money and take responsibility for their own actions, right?? Right!!??

Anyways, I'll get off my soap box now to let you know that if you do not agree with the proposed changes, the CFTC is listening. These changes are not a done deal yet, and if you want to be heard please send an email to secretary@cftc.gov , with "Regulation of Retail Forex" in the subject line. Also, include "RIN 3038-AC61" in the body of the message with your comments.

You can also send your comments by fax: (202) 418-5521

Or good ol' snail mail: David Stawick, Secretary, Commodity Futures Trading Commission, 1155 21st Street, N.W., Washington, DC 20581

Please know that your comments will become public record and any negative comments, including profanity, will probably end up crumpled and used in a game of office basketball. So be nice and remember that when you send in a comment you represent all of us forex traders out there! Good luck!"

What is not mentioned is the ripple effect that will happen if this is passed.

Traders will move money offshore resulting in less income for USA based brokers & less tax for the government

New traders, or traders without vast amounts of funds will not be able to trade.

The wealthly will continue to make more & more while everyone else will have 1 less means of investing.

As the Spot Forex Market becomes more popular I would think it should become more accessable not less. 

Traders learn by trying & making mistakes. I agree that there should be some regulation but not on the traders side. It should only be on the Broker side.

Leverage is a fine tool. To much is bad but to little makes it impossible. Why should only investors with plenty of cash be allowed to trade. 

10-1 leverage is way to deep a cut for the everyday average Retail Forex Trader. 100-1 Should be the max & we should be able to adjust it as we, the traders, see fit not anyone else. 

These are plenty of other ways to do this without 1 broad stroke & eleminating retail Forex trading. 

We could do leverage levels based on account size or maybe even based on proof of income or something, but to just chop it down 90% is not they way it should be done.

I respectfully ask you to stop this & the trading comunity & CFTC, NFA & maybe even the Fed can come up with something that we can all work with.

I ask you all to sign this petition & please be serious. No profanity or anything. Just state facts & opinions & please pass it around.