I am writing to oppose restrictions on leveraged and inverse funds. Both of those funds allow investors to engage in investment strategies that is already allowed in an efficient manner. For example, Regulation T margin and portfolio margin offered by brokers already allows significant leverage and an inverse fund could be implemented by shorting the underlying security. What both leveraged and inverse funds facilitate, however, is an efficient way to implement investment strategies already permitted under the regulations without requiring constant monitoring of regulatory and/or broker requirements.
In addition, there are other securities that may be significantly riskier than leveraged and inverse funds that are permitted without any restrictions, such as OTC securities, early development pharmaceutical companies, and securities of so called "meme" companies. Furthermore, level 2 options, which has minimal, if any, restrictions, also permit investors to engage in highly levered trading in both directions.
Leveraged funds and inverse funds are important components of my investment to achieve enhanced returns and hedging, and I believe that investors, not the regulators, should determine what is appropriate for the public investors. I strongly disagree with imposing any restrictions on my right to invest in leveraged and inverse funds.
Chang Choi Comment On Regulatory Notice 22-08
I am writing to oppose restrictions on leveraged and inverse funds. Both of those funds allow investors to engage in investment strategies that is already allowed in an efficient manner. For example, Regulation T margin and portfolio margin offered by brokers already allows significant leverage and an inverse fund could be implemented by shorting the underlying security. What both leveraged and inverse funds facilitate, however, is an efficient way to implement investment strategies already permitted under the regulations without requiring constant monitoring of regulatory and/or broker requirements.
In addition, there are other securities that may be significantly riskier than leveraged and inverse funds that are permitted without any restrictions, such as OTC securities, early development pharmaceutical companies, and securities of so called "meme" companies. Furthermore, level 2 options, which has minimal, if any, restrictions, also permit investors to engage in highly levered trading in both directions.
Leveraged funds and inverse funds are important components of my investment to achieve enhanced returns and hedging, and I believe that investors, not the regulators, should determine what is appropriate for the public investors. I strongly disagree with imposing any restrictions on my right to invest in leveraged and inverse funds.