CFTC: Leverage proposal calls the Lawmakers attention, Congressmen concerned (Barcelona) - “I am pleased that the CFTC Chairman acknowledged our concerns and appeared open to changes to the leverage requirement,” has declared the Congressman Leonar Boswell in his testimony regarding the implementation of changes in the Commodity Exchange Act contained in the 2008 Farm Bill.

About the CFTC proposed rule to limit leverage to 10:1 in US, Boswell also 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."

US Lawmakers have expressed their concern about the proposal and its possibles negative consequences on the retail foreign exchange market inside the United States. At the Agriculture Farm Commodities subcommittee, several lawmakers have heard CFTC Chairman Gary Gensler about a provision in the commission's proposal that would restrict retail Forex investors to put even more money at risk. "Who are you [CFTC] trying to protect here?" said House Agriculture Chairman Collin Peterson, "I think they are trying to fix a problem that doesn't really exist."

Peterson concluded that he hopes the CFTC will listen market players and they will try to harmonize the rule with the US markets necessities.

The market has massively reacted to the CFTC proposal rule to limit the leverage in the United States to 10:1 in Forex. Around 5600 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.

“Cutting the US market out of FX entirely will significantly impact the rest of the world’s trading as a great deal of liquidity will be wiped out.” said James Bibbings, President and CEO of Turnkey Trading Partners, during the first open discussion organized at on January 21. He also commented that “Of course we cannot think for the CFTC; we can only anticipate the progression of what’s to come should this bill pass."

Follow the discussion in the Forum: CFTC to Kill US Retail Forex Market? thread.

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