With all the latest CFTC regulatory madness going on, I foresee a lot of forex brokers consolidating or merging up to keep their market share. The latest acquisition is that of CMS forex. See more

Recently, the U.S. Commodity Futures Trading Commission (CFTC) announced that it is seeking public
comment on proposed regulations concerning Forex trading.

WHAT ARE THE PROPOSED CHANGES?

• Require retail foreign exchange dealers to limit the leverage available to their retail customers to 10 to 1.
Below is an example of how the proposed leverage reduction would affect your Forex trading account.

• Require all retail Forex industry players, including Introducing Brokers, to register with the CFTC.

• Implement a $20 million minimum net capital standard, with an additional volume-based minimum
capital threshold.

HOW WILL THESE CHANGES AFFECT FOREX TRADERS AND THE AMERICAN ECONOMY?

Should the 10 to 1 leverage rule proposed by the CFTC be adopted:

• Funded accounts currently in the U.S. system can be expected to go offshore.

• Forex fraud may worsen, not improve. Unregulated dealers from around the world will thrive, while operating
without requirements for capital adequacy, risk management models, marketing ethics, dealing practices or
even returning of customers funds.

• The United States may cost itself millions of dollars in trade revenue.

• Thousands of white collar jobs that require an advanced education and range from software developers to
accountants to foreign exchange dealers may be eliminated, or move out of the United States.