CFTC Reviewing Retail Forex Trading Rules Following FXCM Debacle

hedron · Feb 11, 2015

http://www.wsj.com/articles/cftc-re...ading-rules-following-fxcm-debacle-1423673421

What is the meaning of this? Are they going introduce a whole new set of regulations to save us from ourselves? If the SNB didn't mess with the market this never would have happened to begin with. The problem is the regulations. Regulations can't possibly save us from other regulations that messed up the market to begin with.

i960 · Feb 11, 2015

My hope is that they don't change a damn thing. The only healthy change would be to increase margins on pegged or otherwise manipulated currencies. That makes sense. A knee-jerk "retail doesn't know how to protect themselves, therefore let's a make a change which screws with retail yet still benefits the pros" wouldn't be cool.

MrN · Feb 11, 2015

Agree. The funny thing is that it was not a disaster, it was actually an example of the system working. Stockholder equity was nearly wiped out but no customers suffered loss do to brokerage-type failure, instead a strong hand stepped in to provide capital. LUK was willing to do this in large part because the business model under normal circumstances is quite lucrative for the broker/dealer. If the regs impact the profitability of the model so that it is not a desirable business, who will step up next time??

i960 said:
My hope is that they don't change a damn thing. The only healthy change would be to increase margins on pegged or otherwise manipulated currencies. That makes sense. A knee-jerk "retail doesn't know how to protect themselves, therefore let's a make a change which screws with retail yet still benefits the pros" wouldn't be cool.

JamesL · Feb 12, 2015

This is what they're looking at:

http://forexmagnates.com/us-regulators-look-at-tightening-leverage-ratios-for-overseas-customers/

US Regulators Look at Tightening Leverage Ratios for Overseas Customers

doggyfx · Feb 18, 2015

JamesL said:
This is what they're looking at:

http://forexmagnates.com/us-regulators-look-at-tightening-leverage-ratios-for-overseas-customers/

US Regulators Look at Tightening Leverage Ratios for Overseas Customers

Interesting... Seems FXCM which get suffered enough shall be urged to filter out "hobby traders" from their platform, limiting access to amateurs..

stephane · Feb 18, 2015

That's stupid. It's easy to open offshore company or to trade with an offshore broker.

doggyfx · Feb 26, 2015

stephane said:
That's stupid. It's easy to open offshore company or to trade with an offshore broker.

Regulation matters a lot. But when such situations occur (I'm talking about CHF) it becomes really hard to consider regulation as serious argument for any broker. It's better to stay with CySec broker with money saved, rather than devastated with CFTC one.
It's a rhetoric question and a matter of choice of course.

loyek590 · Feb 26, 2015

other than Swiss citizens who have their money denominated in Swiss Francs, and a few brokerage firms, and a few traders who got hurt in this fiasco, how did breaking the peg hurt the man on the street? And furthermore how did betting on it hurt the economy or the average citizen?

If you want to regulate make a law that says you can't peg or unpeg without letting me know first.