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Jeremy Ross Comment On Regulatory Notice 22-08

Jeremy Ross
N/A

I think the individual should have the opportunity to make whatever Investments he or she chooses is appropriate. The regulator shouldn't tell him what the individual can and can't do. If there is fraud involved, that's a different matter. But if the individual would like to use a leverage long or inverse product, he should have the right to do so. But I do think that it's fair for the regulator to require an educated consumer on leveraged products where the ETF or etn that is leveraged, the entity it tracks doesn't have a circuit breaker, and the fund doesn't have the opportunity to rebalance at the end of the day and needs to close because of the daily move was too large - you can make the case that potentially a test needs to be done to take a position in those. So if there's a risk that the fund can't rebalance because of what it tracks has a daily percent move that is too large and the fund will need to close that day, perhaps a test or some other qualifying mechanism for the individual may be warranted. But as long as the fund can rebalance because the daily move is controlled by a circuit breaker or some other mechanism, I think anybody should be able to take a position in those without special circumstances.