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Chris Midgley Comment On Regulatory Notice 22-08

Chris Midgley
n/a

The proposals put forward are a solution in search of a problem. Leave Retail Investors alone. Retail Investors do not want, nor do we need, your "protection". Government regulation already restricts the general public from certain investments with the accredited investor rules, we do not need additional prohibitions placed upon us. It is difficult for me to believe that there are not more pressing matters in which FINRA could be investing their time.

Retail Investors understand there are risks and we use our own funds to invest. Having greater access to asset classes, leveraged and inverse funds provides Retail Investors with the potential for a far more diversified portfolio than at any time in history. They provide us with opportunities for hedging strategies which, in the past, have been available only to the wealthiest market participants.

The cynic in me would point out that FINRA has no concern whatsoever that the average Joe might take some of his own income and lose it in a casino or waste it buying cheaply made trinkets from foreign manufacturers. But should that same Joe have the audacity to buy some OTM calls on a leveraged, inverse ETF against the SP500 at a time of increased volatility in the market, well, no, that you cannot abide.

The point is that you do not care if the general public waste their own money on any other thing. You do not care if the middle or lower class "lose their money" on a home business, in a casino, on lottery tickets, starting a restaurant, or a degree in liberal arts, just so long as they don't "lose their money" on certain ETFs. So it is not about "protecting" the general public at all.

Everyone knows there is risk involved but there is also gain as well. Weighing the risk, managing the risk is what Retail Investors do as often as we participate in the market. Just like everyone else who participates in the market. Though we do it with our own money and without any bailouts.