will forex trading be illegal?

I came across a link to this post on forex-tsd while searching the web tonite. I didn't see anything like it on FF so
I thought I would put it out here. (Can I do that?)


http://www.forex-tsd.com/general-dis...llegal-us.html

i really doubt that house bill or whatever they're discussing over at tsd has been interpreted correctly.

in my opinion at least, the retail market is too important to just disappear overnight, even if only in the u.s

Read some of the bill, looks scary. page 558 emergency authority of the newly formed overseeing agency to limit, stop and liquidate positions.

you should read the contracts you sign when you open an account... they all have the ability to liquidate your positions at anytime they feel necessary.

Yep and if you're and average joe trader with a bucket broke r, your account money aint yours, ask the folks with refco.

The way I read the bill (scanned over more like it) This new agency that will be formed will have the right to stop trading if they feel necessary... like limits i'm guessing?

Well first, they aren't reading it right. The passages quoted don't do that much and don't necessarily apply to us. At least as traders. Most ppl on the internet would make very bad lawyers.

It does look like it'll pass tho, it's a massive piece of legislation.

Basically what it appears to do is modify an old bill that defines "eligible parties" by adding retail foreign exchange into the mix. "Eligible parties" are those like investment banks, brokers, insurance companies, and registered reps. It's a bad hack, hard to read, but it's there.

The most obvious thing it does is require brokers to meet the 20m minimum cash requirement. This requirement is phased in over 120 days, so most brokers won't have a problem. This doesn't mean you can't place orders, but the other party can't accept them unless they fit the bill.

Obviously there is no jurisdiction over foreign brokers, so once again we're chasing off small business in the name of "safety." Sigh, guess we don't really want any tax revenue these days.

It also puts some limits on trading designed to manipulate the market price. Ie: If you bought-up all of the grain contracts in order to manipulate the price you could get fined, or the contracts could get modified or liquidated.

Another important element is that if you aren't an eligible party you are prohibited from soliciting or accepting orders, funds, or accepting discretionary trading authority over other people's accounts. Exactly what you have to do to qualify however... is a bit of a gray area. Section 15C of the securities and exchange act is the most obvious, but you might also have to join the NFA as a member.

You can join the NFA as a CTA (commodities trading advisor) by filling out a form and paying $750 a year dues, last I checked. Or if you're a fund operator as a "pool operator" for the same fee. There are some obvious regulations you have to follow then. Not sure if the sponsorship requirements still apply to the securities side of things.