The U.S. Commodity Futures Trading Commission (CFTC) announced on January 13, 2010 that it is seeking public comment on proposed regulations concerning retail forex trading.

The proposed regulation includes numerous proposed changes that GFT agrees with, and that will be good for the U.S. forex industry. A portion of the proposed changes, GFT and the entire U.S. forex industry disagree with, especially as it pertains to reducing the maximum amount of leverage to 10 to 1 (10 percent).

According to the CFTC, "leverage in retail forex customer accounts would be subject to a 10-to-1 limitation," which means 10:1 leverage would be the maximum amount allowed for forex traders in the U.S.

An example of how the proposed regulatory restrictions would affect a major currency pair appears below:

Maximum Leverage under
Current Regulations     Maximum Leverage under
Proposed Changes
USD/JPY                         USD/JPY
1 lot (100,000)                  1 lot (100,000)
100:1 leverage (one percent)     10:1 leverage (10 percent)
Margin requirement: $1,000     Margin requirement: $10,000

"We believe that these proposed regulations would be a crippling blow to the industry and drive it offshore into the hands of foreign competitors," said Gary Tilkin, president & CEO.

"Even worse, it would encourage fraud, as customers seeking to trade retail forex would have no other legitimate alternative in the U.S.," said Tilkin.

Should you feel strongly about the proposal, there is still time for you to help determine the outcome of these proposed regulations. You can make an impact by sending comments directly to the CFTC at: secretary@cftc.gov.

Please include 'Regulation of Retail Forex' in the subject line of your message and the identification number
RIN 3038-AC61 in the body of the message.

You can also submit your comments by any of the following methods (include above ID number):

    * Fax: (202) 418-5521
    * Mail: David Stawick, Secretary
      Commodity Futures Trading Commission
      1155 21st Street, N.W.,
      Washington, DC 20581
    * Courier: Use the same as mail above.

In the next few days, GFT and the rest of the U.S. forex industry will be releasing a more formal opinion about the proposed changes. If you wish, you can read further details about the regulation on the CFTC website by clicking here.

In the meantime, we encourage you to voice your opinions to the CFTC and your local U.S. representative.

Learn more about the CFTC proposed leverage changes here.