http://newsguide.us/index.php?path=/business/investment/Alpari-US-Supports-FOREX-Dealers-Coalition-in-Opposition-to-Proposed-CFTC-Leverage-Rule/Alpari (US), LLC, a regulated Foreign Exchange company and global provider of online Forex trading, has announced public support of the Foreign Exchange Dealers Coalition (FXDC), an alliance of US foreign exchange market dealers formed to collectively challenge the CFTC proposed rule requiring Forex dealers to collect a 10% deposit on all foreign exchange transactions.
February 11, 2010 -- Alpari (US), LLC, a regulated Foreign Exchange company and global provider of online Forex trading, has announced public support of the Foreign Exchange Dealers Coalition (FXDC), an alliance of US foreign exchange market dealers formed to collectively challenge the CFTC proposed rule requiring Forex dealers to collect a 10% deposit on all foreign exchange transactions.
The FXDC was formed to pool industry resources and advocate in favor of fair regulation and market oversight without limiting freedom of choice, innovation or job creation in the forex market. The coalition is supported by many prominent US forex dealers, including GFT Forex, Oanda, IBFX, Gain Capital, FXCM, FX Solutions, FXDD, PFG Best, CMS Forex and Alpari (US).Under the CFTC proposal, significant amendments have been proposed to the leverage permitted on certain accounts. If passed, the proposed rule would disproportionately effect on average retail investors. Currently, the CFTC enforces a 100:1 leverage (1% margin requirement) to open and maintain a position on a forex transaction. With the proposed 10:1 leverage (10% margin requirement), retail traders would have to invest significantly more to place the trades of the same size, ultimately resulting in decreased return or loss on invested margins. The risk-reward ratio that is so appealing to the retail investor today would no longer be available.
Olga Rybalkina, CEO of Alpari (US), LLC, commented, “Alpari (US) has always been a strong supporter of the fair business practices and investor protections offered through industry regulations, but
we do not support this CFTC proposal. We believe it discourages new investors from learning how to trade forex and developing their trading skills. Alpari places a strong emphasis on educating retail traders so they can make informed decisions. We believe this new regulation will effectively close the door on the retail traders in the forex market and, once again, make FX trading only accessible to financial institutions.”