When the proposed rule release hit the airwaves back in January, the shock was deafening. This would be the Commodity Futures Trading Commission’s (CFTC) proposal: Regulation of Off-Exchange Retail Foreign Exchange Transactions. The industry was well aware new regulations were in the works, it just wasn’t so sure of the details. And as they say, the devil’s in the details.

Continue reading ‘Forex: Leveraging free speech’ »

One of our contacts in the forex industry forwarded me a note with a link to the comment letters on the Commodity Futures Trading Commission rule proposal limiting leverage for retail forex traders to 10-1. There are nearly 5,000 comments and from the couple of dozen I saw, people are hopping mad.

Continue reading ‘Forex rule pushback’ »

Yesterday, we spoke with CFTC and Congress about how new regulation coming out of Washington would affect traders. We also sat down with former CFTC Chair Sharon Brown-Hruska, now a vice president in NERA’s securities and finance practice. Brown-Hruska says that while it’s justified for the CFTC to crack down on illegal forex operations, the agency’s current proposal to limit leverage in OTC forex to 10:1 “overshoots the mark.”

Continue reading ‘From Washington: Get ready, new regs coming’ »

With regulatory reform in Washington THE issue affecting the futures industry right now, Futures magazine is in D.C. this week to talk with Congress and the CFTC about what’s ahead.

House Agriculture CommitteeChairman Collin Peterson (D-MN), whose Peterson-Frank Amendment to HR 4173, passed by the House in December, established a central clearing requirement for OTC derivatives, says, “the way our legislation is crafted right now, you will see a lot of [OTC products] standardized, 70%-80% of this stuff will be standardized.” He mentioned how the House Ag Committee is working with European regulators and that CFTC Chairman Gary Gensler is focused on coming out with harmonized international regulation. 

Continue reading ‘From Washington: Futures goes to Congress, CFTC’ »

The Washington Post reported today that commercial banks and investment institutions are shifting their political donations towards Republicans. Apparently Democrats were garnering two-thirds of those donations as recently as the beginning of 2009 and now that is shifting to an even split despite the Democratic majority.

This can sarcastically be placed under “shocking news” of the day category but there is something even more cynical at play in this world of no shame.

Continue reading ‘Pay to play part infinity’ »

A couple of weeks ago I went down to Key Biscayne, Florida for the Managed Funds Association (MFA) conference. To be more precise, I went down to Florida to meet with and interview several commodity trading advisors who managed to earn positive returns in a difficult year.

Continue reading ‘Party crasher’ »

This week I saw a story about how a college intern at Lehman Brothers in 2006 was trading a $150 million proprietary trading book for the firm. It was a revealing anecdote about the nature of risk management at the time from a recently released book by former Lehman prop trader Lawrence McDonald.

Continue reading ‘And you wonder why?’ »

CME Group is in talks to buy Dow Jones Indexes, according to The Financial Times, which reports that a deal would cost CME Group $700 million. This Wall Street Journal story cites the advantages of the deal, including cost cutting (as CME Group now pays Dow Jones licensing fees) and protecting the CME Group’s existing business lines. It’s unclear how or if this would affect CME Group’s current exclusive licensing agreement with S&P indexes. A CME Group spokesperson would not comment on anything specific. Do you think the deal will happen? Would it affect your trading? Leave your thoughts in the comments section below.

Forex dealers are not taking the latest rogue regulatory action – CFTC’s proposal to limit leverage in OTC forex - lying down. Last week, the Forex Dealers Coalition (FXDC), a group of the nine largest firms in the industry, sent a letter to the CFTC saying its proposal to limit leverage to 10-1 would “be a crippling blow to the industry and drive it offshore.” The CFTC kicked off its 60-day comment period last week, after which it will make its decision on the proposal. You can get more information and send a letter to the CFTC through FXDC’s Web site, www.fxdc.org.  How will the proposal affect your trading? Leave your comments below.

Back in March we wrote about the report “Sold Out: How Wall Street and Washington Betrayed America,” published by Essential Information and the Consumer Education Foundation. The report stated that $5 billion in political influence purchasing in Washington over the past decade had led to our current economic collapse.

 The report was anything but shocking as the influence of big money on public policy is no secret. Many depression era reforms were struck down in the past decade, which allowed among other things the merger of commercial and investment banking and an increase in the amount of leverage financial institutions could utilize.

Continue reading ‘Say that again, you must be joking’ »