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Erik Smith Comment On Regulatory Notice 22-08

Erik Smith
N/A

While I understand the desire to ensure a safer environment for retail investors, that effort should be limited to what is clearly predatory or fraudulent. Leveraged products are key to many effective risk management strategies which would otherwise require the use of options (significantly more complex) or margin (significantly riskier), both of which are easily accessible to retail investors without much more protection than forcing their acceptance of a warning that those represent additional risks. I do not see how leveraged products (where finance professionals manage the underlying option/margin details) present any higher risk to the retail investor. As an educated investor, I worry that my access to products that provide fundamental support to my investment strategies will be contingent on meeting some arbitrary criterion -- whether that be a test, "net worth" or account balance, or something else entirely. I would hope to see investor education valued more highly than bureaucratic red tape that only institutional investors and financial professionals have the ability to break through.