And do you think if it does that the UK Divisions will also lower their leverage in response? To what leverage level?
I dont think the UK divisions of US firms will lower their margin. They did the last time to 100-1. It was the UK divisions of US regulated FCMS that lowered the leverage down to 100-1 not the FSA who regulates them. 10-1 Will lose too much business here in the US , so I doubt they will lower thier margin to 10-1 this time. They could pull out of US altogether if it becomes cost inneffective to be here and just be in the UK. I am not worried about UK frims that are regulated byb the FSA to be they are just as safe as out regulated firms.
And why would you be so smug about the FSA not jumping into bed with the CFTC? Stupidity could be quite contagious, you know ?
Becuase they are the biggest fx market in the world and they do not want to lose that, and they have not parcipitated in the rules for leverage before either. So talk to people overthere and you will see. The fsa did not change their margin requirements. The reason we are doing it here is to drive business to the exchange so the cftc can make their money on all the volume they beleive will come their way. Thats why when last rules were changed in NOV many moved to UK firms, also the leverage was lowered by some UK firms not the FSA.
With Obama's assault on the ability for Big Banks to survive, now might be a good time for FX brokers to team up with them......in their lobbying efforts
There is no way to tell what the FSA will do. Therefore, I say don't give them a chance to rethink leverage in the UK. Stop these leverage rules now! Contact secretary@cftc.gov and make your voices heard. Look at all the people who have contacted CFTC already: http://www.cftc.gov/lawandregulation/federalregister/federalregistercomments/2010/10-001.html
the letters and objections to the 10:1 proposal will have no effect on their decision since they will tell u to go to the exchange and trade forex futures.
http://seekingalpha.com/article/183525-cftc-reform-and-the-death-of-retail-forex (author's reply to his inaccuracies: http://market-ticker.org/archives/1882-More-On-Forex-Trading-and-Brokerages.html) i thought this was a good article discussing the 10:1 ruling proposal and getting retail liquidity to consider moving to the regulated "/6x" futures contracts. more articles like this will appear and douse the feeble objections.
US firms can just withdraw from the NFA... i don't believe they are required to be NFA regulated at all.