CFTC vs FXDC – Battle for Fair Leverage

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CFTC = A US governmental body that seeks to regulate and monitor financial markets. However, like any government body the CFTC is inept. It is run by imbeciles who know little to nothing about what they’re trying to regulate.

FXDC = The Forex Dealers Coalition is comprised of the big boy brokers in Forex: GFT, FXCM, FX Solutions, FXDD, CMS, Oanda, IBFX, Gain Capital, Alpari US, and PFG. Between them these brokers have billions in funds and they swing one massive punch.

Come March these two mammoths will collide. In case you do not know, the CFTC seeks to impose a maximum of 10:1 leverage on the Forex market. Obviously the FXDC is opposed to this rule. Imposing such a restrictive rule on US brokers will effectively destroy the US Forex industry.

What does this mean for you as a trader? Well it doesn’t mean you won’t be able to trade! Worse comes to worse you can transfer your account to a UK broker or open a new account with a UK broker. So don’t worry it is not the end of Forex for you.

My belief is that this will never happen. However, we must remember that we are dealing with a governmental body. This of course means that all logic will be thrown out the window. Therefore CFTC may very well attempt to impose this rule on brokers.

The good thing is that the FXDC has enough money to hire the world’s best lawyers Denny Crane and Alan Shore (you will only get that if you’re a Boston Legal fan). If the CFTC and FXDC end up in court it will likely take several years for the case to be resolved. Therefore it is highly unlikely the rule will actually come into effect any time soon.

Anyway, enough rambling on by me. The point of this post was to show everybody what the brokers have to say about this. Check out the FXDC page below to read about the issue and see what you can do (please note link opens in new window):

no longer available

Here are links to statements from individual brokers on these proposed rules (please note links open in new window):

GFT: no longer available

Forex.com (also known as Gain Capital): no longer available

Alpari US: no longer available

PFG: no longer available

Oanda: no longer available

IBFX: no longer available

Have your say, what do you think about the 10:1 leverage rule? Comment below!