Skip to main content

Ian Failing Comment On Regulatory Notice 22-08

Ian Failing
N/A

"Protecting us from ourselves" -- i.e., barring us from choosing to take a on position of high risk and high reward -- has no place in America, especially in an area so obviously volatile as the equity markets. Existing regulations well protect us citizens from being duped. Adding regulations to try to protect us from financial losses is a patronizing fool's errand, which will only block retail investors from reaping the benefits of the availability of these tools that will, let's be honest, continue to be available to the rich and powerful in some form, in some other name, with some other combination of contracts and activities that ends up being a wash that is fungibily indiscernable from the banned action. If volatility is your concern, you should implement a financial transaction tax to curtail high-frequency trading, which by definition is unrelated to a corporation's true value. If you find personal loss unacceptable, then you should ban citizens from owning investments that might reduce in value, such as stocks. The risk of personal loss is vehemently communicated, widely understood, and vital to the functioning of a capitalistic democracy. We individuals are able to take or not to take our desired degree of risk, and to mitigate and manage that risk to the degree that we risk with private insurance or -- the same thing -- advanced financial contracts. Or not. Our choice. The system functions. The fact that some people choose to enter into a situation that they foreknow often has a negative outcome is absolutely no reason to curtail others' freedom of attempting the same. The proper solution is absolutely not to curtail our freedom to make and price contracts as we see fit.