Comments: As a private investor I have utilized ETFs for about 20 years and leveraged/inverse investment vehicles for approx. 12 years or so. These vehicles (specifically leveraged/inverse ETFs/ETNs) have been extremely helpful to enhance the profitability of my investment portfolio/strategy resulting in protecting my investments when these vehicles are used as hedge instruments, and in trading to generate additional profits (incl. short-term profits) when markets, a commodity, a sector, etc. show greater volatility and tend to move stronger in one or the other direction. Such profits would have not been available if these leveraged/inverse investment vehicles were not available to me as a retail investor since I rarely trade options where the risk is much higher, IMO, than with the leveraged/inverse investment vehicles (ETFs/ETNs). I feel very comfortable to having used these leveraged/inverse investment vehicles (ETFs/ETNs) for well over a decade now, and due to my risk tolerance/risk management strategy I never felt comfortable with trading options, but the leveraged/inverse investment vehicles have filled that gap perfectly. The issuers such as Direxion, Proshares, etc. as well as the brokerage firms I use provide extensive information on these leveraged/inverse investment vehicles with the appropriate risk warnings and the description of the nature of these vehicles how these might be utilized. My brokerage firm also has an annual information paper on these vehicles including on options they send out and that has to be signed in order to continue to trade (buy/sell) these instruments, which I think is sufficient information to retail investors to inform, make them aware of potential risks to use these instruments, etc. Myself as a retail investor, also having talked to many other retail investors over the years, we really need these instruments as these are (without further restrictions) to enhance our investment results. The current rules in place regarding these leveraged/inverse investment vehicles seem to be sufficient, IMO. There is definitely no need to restrict access to these instruments for groups of retail investors as with additional rules/restrictions we may not be able to protect our stock portfolios and/or enhance our investment results as effectively as we can right now with these instruments, and we may also see liquidity in these instruments suffer (have a reduced liquidity) if it was more difficult to trade such instruments and/or if the pool of traders/investors with access to these instruments was to be reduced through various new restrictions/qualifications, etc. Kindly, Dietmar Scherf [REDACTED]
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Dietmar Scherf Comment On Regulatory Notice 22-08
Comments: As a private investor I have utilized ETFs for about 20 years and leveraged/inverse investment vehicles for approx. 12 years or so. These vehicles (specifically leveraged/inverse ETFs/ETNs) have been extremely helpful to enhance the profitability of my investment portfolio/strategy resulting in protecting my investments when these vehicles are used as hedge instruments, and in trading to generate additional profits (incl. short-term profits) when markets, a commodity, a sector, etc. show greater volatility and tend to move stronger in one or the other direction. Such profits would have not been available if these leveraged/inverse investment vehicles were not available to me as a retail investor since I rarely trade options where the risk is much higher, IMO, than with the leveraged/inverse investment vehicles (ETFs/ETNs). I feel very comfortable to having used these leveraged/inverse investment vehicles (ETFs/ETNs) for well over a decade now, and due to my risk tolerance/risk management strategy I never felt comfortable with trading options, but the leveraged/inverse investment vehicles have filled that gap perfectly. The issuers such as Direxion, Proshares, etc. as well as the brokerage firms I use provide extensive information on these leveraged/inverse investment vehicles with the appropriate risk warnings and the description of the nature of these vehicles how these might be utilized. My brokerage firm also has an annual information paper on these vehicles including on options they send out and that has to be signed in order to continue to trade (buy/sell) these instruments, which I think is sufficient information to retail investors to inform, make them aware of potential risks to use these instruments, etc. Myself as a retail investor, also having talked to many other retail investors over the years, we really need these instruments as these are (without further restrictions) to enhance our investment results. The current rules in place regarding these leveraged/inverse investment vehicles seem to be sufficient, IMO. There is definitely no need to restrict access to these instruments for groups of retail investors as with additional rules/restrictions we may not be able to protect our stock portfolios and/or enhance our investment results as effectively as we can right now with these instruments, and we may also see liquidity in these instruments suffer (have a reduced liquidity) if it was more difficult to trade such instruments and/or if the pool of traders/investors with access to these instruments was to be reduced through various new restrictions/qualifications, etc. Kindly, Dietmar Scherf [REDACTED]