Dhaneesh Kumbhani Comment On Regulatory Notice 22-08
Dhaneesh Kumbhani
N/A
Having used these products for a very long time, i would make the following observations:
* these instruments fix leverage as opposed to variable leverage provided on margin by brokerages. individual investors are smart enough to adjust their own leverage accordingly.
* the cost of borrowing implicit in leverage funds will often be better than the margin charged to individual investors by their brokerages, an advantage for the investor. putting a net worth requirement works against the little guy investor and plays right into predatory hedge funds -- is that what regulators really want?
* investors have the ability to take more leverage through options and futures than they do through these levered funds.
* in the same way the government doesn't prevent people from taking high LTV mortgages, they shouldn't interfere in individuals ability to invest in stocks whether through levered etfs, options, margin or futures.
* the cooling off period is terrible because it could force illiquidity on small investors exactly when they need liquidity while hedge funds take advantage of the situation.
* if this heavy regulation moves forward, an effort should be made to balance the interests of individual investors and make sure hedge funds are also prevented from continuing to act against the interests of individual investors in these products.
* while further education on leverage (ETFS, options, futures, real estate mortgages etc.) is not a bad idea, interfering in investing with cooling off periods is an awful idea.
For the Public
FINRA DATA
FINRA Data provides non-commercial use of data, specifically the ability to save data views and create and manage a Bond Watchlist.
For Industry Professionals
FINPRO
Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks.
For Member Firms
FINRA GATEWAY
Firm compliance professionals can access filings and requests, run reports and submit support tickets.
For Case Participants
DR PORTAL
Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal.
Need Help? | Check System Status
Log In to other FINRA systems
Dhaneesh Kumbhani Comment On Regulatory Notice 22-08
Having used these products for a very long time, i would make the following observations:
* these instruments fix leverage as opposed to variable leverage provided on margin by brokerages. individual investors are smart enough to adjust their own leverage accordingly.
* the cost of borrowing implicit in leverage funds will often be better than the margin charged to individual investors by their brokerages, an advantage for the investor. putting a net worth requirement works against the little guy investor and plays right into predatory hedge funds -- is that what regulators really want?
* investors have the ability to take more leverage through options and futures than they do through these levered funds.
* in the same way the government doesn't prevent people from taking high LTV mortgages, they shouldn't interfere in individuals ability to invest in stocks whether through levered etfs, options, margin or futures.
* the cooling off period is terrible because it could force illiquidity on small investors exactly when they need liquidity while hedge funds take advantage of the situation.
* if this heavy regulation moves forward, an effort should be made to balance the interests of individual investors and make sure hedge funds are also prevented from continuing to act against the interests of individual investors in these products.
* while further education on leverage (ETFS, options, futures, real estate mortgages etc.) is not a bad idea, interfering in investing with cooling off periods is an awful idea.