I am writing today to express my view that investors, not regulators, should be able to determine the appropriate investments for their accounts. In particular, leveraged and inverse ETF funds should be acceptable investments for all investors. I have used these types of funds personally to help hedge my portfolio and feel that they have provided me with some great alternatives to traditional hedging using equity and index options that many investors do not understand appropriately.
While it may be appropriate for brokerage houses to determine if such securities should be subject to additional margin or other requirements, I believe that a "one size fits all" regulation from regulators is not appropriate. In fact, certain types of leveraged and inverse ETFs could help lower margin and other requirements on individual investors as these funds can be used to reduce risk and exposures in a diversified portfolio.
Thank you for your consideration and these issues need to be thought through and handled in an appropriate way, but please consider that solving for the last problem could only create more problems going forward.
Andrew McDill Comment On Regulatory Notice 22-08
I am writing today to express my view that investors, not regulators, should be able to determine the appropriate investments for their accounts. In particular, leveraged and inverse ETF funds should be acceptable investments for all investors. I have used these types of funds personally to help hedge my portfolio and feel that they have provided me with some great alternatives to traditional hedging using equity and index options that many investors do not understand appropriately.
While it may be appropriate for brokerage houses to determine if such securities should be subject to additional margin or other requirements, I believe that a "one size fits all" regulation from regulators is not appropriate. In fact, certain types of leveraged and inverse ETFs could help lower margin and other requirements on individual investors as these funds can be used to reduce risk and exposures in a diversified portfolio.
Thank you for your consideration and these issues need to be thought through and handled in an appropriate way, but please consider that solving for the last problem could only create more problems going forward.