CFTC: Leverage proposal calls the Lawmakers attention, Congressmen concerned

FXstreet.com (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 FXstreet.com 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.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

RELATED TOPICS