I wanted to remind you that The U.S. Commodity Futures Trading Commission (CFTC) is seeking public comment on proposed regulations concerning retail forex trading.
According to the CFTC, "leverage in retail forex customer accounts would be subject to a 10-to-1 limitation," which means 10:1 leverage would be the maximum amount allowed for forex traders in the U.S.
Comment Now
Should you feel strongly about the proposal, there is still time for you to help determine the outcome. The deadline for public comment is March 22, 2010. You can make an impact by sending comments directly to the CFTC at: secretary@cftc.gov.
Please include 'Regulation of Retail Forex' in the subject line of your message and the following identification number in the body of the message: RIN 3038-AC61.
You can also submit your comments by any of the following methods . above ID number):
Fax: (202) 418-5521
Mail: David Stawick, Secretary
Commodity Futures Trading Commission
1155 21st Street, N.W.,
Washington, DC 20581
Courier: Use the same address as mail above.
An example of how the proposed regulatory restrictions would affect a major currency pair appears below:
Maximum Leverage under CURRENT Regulations
USD/JPY
1 lot (100,000)
100:1 leverage (one percent)
Margin requirement: $1,000
Maximum Leverage under PROPOSED Regulations
USD/JPY
1 lot (100,000)
10:1 leverage (10 percent)
Margin requirement: $10,000
These proposed regulations will so significantly change the leverage factor as to eliminate the forex trading opportunity for many individual traders.
In addition, those wishing to trade forex with any meaningful leverage would have to seek alternatives outside of the United States if those avenues would even be available to U.S. customers.
Learn more about the CFTC's proposed leverage changes here:
http://www.cftc.gov/newsroom/generalpressreleases/2010/pr5772-10.html