Following the example of the forex dealers a few weeks ago, a group of 6 introducing brokers have banded together to form the Introducing Brokers Coalition against the CFTC proposals for “Regulation of Off-Exchange Retail Foreign Exchange Transactions and Intermediaries”. Unlike the forex dealers, first on the IBs list of proposals they would like to see changed is:
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Is sounds as though some US congressmen have been reading some of the thousands of complaints the CFTC has received about its proposals to reduce leverage on spot forex from 100 to 1 down to 10 to 1.
More on Congressmen Question CFTC 10 to 1 Leverage Reduction
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In the first response I have spotted made by a forex broker to their recent proposal to limit leverage to a maximum of 10 to 1, the CFTC earlier this week published a 6 page letter from Interbank FX on their website. Interbank FX welcome most of the other CFTC proposals, but say that the 10 to 1 leverage proposal:
More on Interbank FX Comment on CFTC 10 to 1 Leverage Proposals
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In response to the proposed legislation to reduce forex leverage to 10 to 1, beleaguered US brokers have banded together to form the Forex Dealers Coalition to fight a common enemy; the CFTC! The Coalition have just launched their website, which urges their readers to:
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It has been brought to our attention that the original link we published to the page on the CFTC website that allowed you to download the 193 page document detailing its newly released proposals to limit leverage in the retail forex industry in the United States to 10 to 1 now simply says:
More on New Download Location for CFTC 10 to 1 Leverage Proposals
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The CFTC has now published details of how to comment on its new ten to one leverage proposals for retail forex accounts. If you click the link at the bottom of that page you can also read the initial comments that the CFTC has received.
More on CFTC Publishes Public Comments on Ten to One Leverage Proposal
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When I started writing this blog in the Spring of 2009 I put forward the proposition that thanks to the advent of the internet and online retail forex brokers it had become possible for anyone possessing an entrepreneurial spirit, and prepared to put in the required effort over a number of years, to learn how to turn $1000 that they were willing and able to lose into a business that could support their family and themselves. I didn't say it was easy, but I did suggest it was possible. All that is about to change. It never was easy, and it looks like it's going to get ten times more difficult, for US citizens at least.
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At long last August 2nd has been and gone, and the dust has settled slightly. We'll cover what still works and what doesn't in a forthcoming post, but for today we're going to concentrate on who said what, and when. We'll do that by working our way down the list of retail forex brokers included in the CFTC report on the financial strength of Futures Commission Merchants. For some reason it seems the better capitalised a broker is the less it has to say about the FIFO fiasco!
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In a recent letter to the Commodity Futures Trading Commission the National Futures Association commented on proposed further increases in net capital requirements for Futures Commission Merchants and Introducing Brokers.
Whilst the NFA:
More on NFA "Respectfully" Criticizes SEC Capital Requirements
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The Commodity Futures Trading Commission recently released its latest report on financial data for Futures Commission Merchants. This contains the numbers as of May 31st 2009, "from reports filed by June 30th 2009". This report is particularly interesting because on May 16th the NFA's minimum net capital requirement for Forex Dealer Members increased from $10,000,000 to $20,000,000. The CFTC helpfully allow you to download monthly data going back to 2002 too. It's interesting to discover which brokers have fallen by the wayside over recent months as successive increases in regulatory capital requirements have weeded out the weaker players.
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