This page contains a Flash digital edition of a book.
>>>
with the necessary tools to put the bad guys away
while allowing reputable and well-capitalized FX
brokers to flourish in this land of opportunity.
The rules that were meant to benefit the industry
instead caused a major public and industry outcry,
particularly against the proposal for limiting leverage
to 10 to 1. Just a few months ago, the CFTC’s
designated self-regulatory organization, the NFA,
has set forth leverage limits at 100 to 1 for the major
currency pairs and 25 to 1 for minors.
The CFTC then opened a 60-day comment period for
the public to address these proposed rules. In the fi rst
few weeks, over 6,000 comments were received by the
Commission. Additionally, major US industry brokers
have formed the Foreign Exchange Dealers Coalition
(“FXDC”) to lobby against the proposed leverage.
The FXDC (http://www.fxdc.org/) has already made
significant strides in lobbying against this insensible
proposal, and has set up a website (www.fxdc.org)
encouraging the public to voice their opinion by
emailing the Secretary of the CFTC. Similarly, most
of the Coalition members have encouraged their
employees and clients to do the same. As one industry
CEO has recently stated, this proposal looks more like a
typo rather than what the actual requirement should be.
Reduction of leverage
In the past four years, the number of foreign exchange
brokers in the US has decreased from over 40 to just
about a dozen today.The FXDC has argued that a
reduction in leverage to 10:1 would further eradicate
this industry in the US. Ultimately, most US clientsClarification of CFTC jurisdiction
as well as foreign clients who currently do business
Let’s step back and remind ourselves why these rules with US foreign exchange brokers will likely rush to
were proposed in the first place. After a number of open accounts with foreign and often unregulated
adverse decisions against the CFTC in two federal brokers. While some of the regulated jurisdictions
appellate circuit courts, the Farm Bill intended to already include a cap on leverage, none have imposed
clarify the CFTC’s jurisdiction over the retail foreign such a drastic limit. Some jurisdictions--like the
exchange area.This legislation specifically sought for United Kingdom, a comparably regulated jurisdiction
the CFTC to promulgate a set of industry rules in compared to the United States--currently do not
order to effectively regulate the retail FX market as enforce leverage limits in FX.
well as provide the necessary customer protection to
its clients. If the proposed leverage were to go into effect, many
retail clients will take their business to places like
After years of fraud, countless Ponzi schemes and the United Kingdom rather than forfeit their ability
unregistered solicitation activities by introducing to trade FX in the US. Consequently, US brokers
brokers, money managers and commodity pool and their US-based employees will be harmed as
operators, the US foreign exchange dealers have well.The industry currently employs thousands of
lobbied in support of these registration requirements. employees, contractors and vendors in the United
The purpose of these rules was to provide the CFTC States. According to FXDC, the industry generates
april 2010 e -FOREX | 111
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150  |  Page 151  |  Page 152  |  Page 153  |  Page 154  |  Page 155  |  Page 156  |  Page 157  |  Page 158  |  Page 159  |  Page 160  |  Page 161  |  Page 162  |  Page 163  |  Page 164  |  Page 165  |  Page 166  |  Page 167  |  Page 168  |  Page 169  |  Page 170  |  Page 171  |  Page 172
Produced with Yudu - www.yudu.com