FX news: Retail FX players now wait CFTC decision
The deadline for comments on the proposals of the US Commodity Futures Trading Commission (CFTC) about retail foreign exchange passed last Monday. However a date for a decision on the proposals has not yet been announced.
The deadline for comments on the proposals of the US Commodity Futures Trading Commission about retail foreign exchange passed last Monday. However a date for a decision on the proposals has not yet been announced.
The proposal to cap leverage at 10:1 is only one of the suggested new regulations that also include stricter rules for the capitalization of the platforms, or Forex Dealer Members.
Predictably, there was a flurry of press releases from interested parties. Oanda’s positioning statement “The CFTC has received almost 10,000 submissions to date, almost uniformly opposed to the 10:1 proposal.”
The CFTC’s unstated purpose in the proposals is to protect investors, particularly from fraud. Scarcely a week goes by without CFTC proceedings being announced against an FX fund (which is never any such thing of course – just a grab-it-and-run scam masquerading as an FX fund). It has been said that more stringent capital requirements will go some way to preventing such abuses. This is largely nonsense of course – most of the scams have no registration with the National Futures Association or the CFTC to begin with – but the raising of the capitalization bar is not the proposal being most fiercely opposed.