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Some American Congressmen are dissatisfied with the CFTC’s proposed leverage limit of 1:10 in forex trading. This is a result of pressure that came from the public and forex dealers. The fight for the US forex industry is still on. Here’s an update.

The CFTC wants to limit leverage to “protect the public”. That’s what CFTC Chairman Gary Gensler claimed in front of a House Committee. Well, this stance was met with angry congressmen. Collin Peterson:

“I don’t get what we are trying to accomplish here by lowering this to 10 to 1,” said House Agriculture Chairman Collin Peterson (D., Minn), saying the proposal appears to put investors’ money even more at risk. “Who are you trying to protect here?”

Another member, Jim Marshall.  addressed the main point:

“If our leverage rules are 10-to-1 and leverage rules elsewhere are 100-to-1, the business is going to move elsewhere,” Marshall said, adding that investors could be even less protected if business moves to a country with lax regulations.

These opinions by congressmen didn’t come out of anywhere. 5,600 comments were submitted about the proposed regulation. Gary Gensler admitted that most of them were against the 1:10 leverage proposal. Also the FXDC – Forex Dealers Coalition had a contribution.

So, the fight is far from over, and there’s still a chance to have logical regulation in the US: regulation that will protect the people from scams but will be too protective to kill the forex industry and to send traders abroad, possibly to really unprotected shores…

If you’re an American who cares about the forex industry, I urge you to write to your Congressman, to the CFTC and to anyone that can make a difference. It’s an open game.

Thanks to Fransesc Riverola for pointing this news item out. Michael Greenberg thinks that there weren’t enough comments, and shows pessimism.