Originally Posted by daraknor

In principle I completely agree with you that local domain is sometimes good sometimes bad. The obvious intent of the law is to make it so retail brokers must submit every trade to the prime broker, which then gouges the market in commissions. The retail broker earns no spread, and needs to charge commission. The only leverage the retail broker can offer is the leverage the prime broker offers. The lot sizes are dictated by the prime broker and they tend to be 5 lot minimum right now. ECNs take a hit, because you need a separate buy and sell account, and the ECNs still rely on the prime brokers for settlement, and the prime broker commissions and the ECN commissions stack. In other words, everybody gives away all of their profits to the prime brokers, nobody trades net, and the leverage/credit you get are entirely dictated by the prime brokers.

I think this qualifies as bad especially since it makes MT4 illegal. MT4 can *only* do net trades. We're trying to hack in Straight Through Processing and it is hard. Even that isn't enough. I'm sure I'll be able to continue trading after the bill passes, but I'm also sure that if the bill passes, leverage and most brokers are gone. The only ones that are left are expensive.