Article Summary:

Article Content:
The U.S. Commodity Futures Trading Commission (CFTC) has put up a new regulatory proposition for the market participants to discuss. In addition to the capital, regulatory and risk-disclosure requirements, the FCMs (futures commission merchants) and RFEDs (retail foreign exchange dealers) will be limited to 1:10 leverage maximum. Considering the popularity of 1:100 leverage in the on-line Forex industry, such a limit, if implemented, would hit hard the Forex broekrs registered or operating in United States. CFTC announced this proposal on January 13th and the part about the leverage in it reads:

For example, FCMs and RFEDs would be required to maintain net capital of  million plus 5% of the amount, if any, by which liabilities to retail forex customers exceed million. Leverage in retail forex customer accounts would be subject to a 10-to-1 limitation.

The good thing that it’s still just a proposal and that CFTC is expecting a feedback from the market participants to evaluate the necessity and possibility of such means. You may send your opinion to CFTC via the e-mail: secretary@cftc.gov (don’t forget to use “Regulation of Retail Forex” as the subject) or via the postal mail:

David Stawick, Secretary, Commodity Futures Trading Commission
1155 21st Street, N.W.
Washington, DC 20581

In either case include RIN 3038-AC61 identification number in the body of your mail.
(…)Read the rest of CFTC Wants to Limit Leverage to 1:10 (18 words)

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Posted on Forex blog.

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