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Matthew Buchko Comment On Regulatory Notice 22-08

Matthew Buchko
N/A

What kind of nonsense is this - the two companies that run the two leveraged ETFs I own both sent me email alerts about FINRA's potential rule changes this morning, urging me to submit comments on the rules, which have a deadline of only 5 days away?!? That's so unfair it's like FINRA doesn't care what investors have to say, their minds are made up. Consider how this extra burden on brokers is going to raise their costs, and how that's going to be passed along to clients - this rule will cost us money!

Leveraged ETFs are not much more risky than leveraged closed end funds (CEFs) - both can lose value very quickly when the market is stressed, like the start of the pandemic in March 2020, where my leveraged CEFs lost 40% of their value in less than a month because they were forced to delever to meet The 1940 Act on CEF leverage limits. I've been managing my own money since 2001 - I do not need FINRA babysitting my investing decisions, or putting up roadblocks to stop me from investing in whatever I want.

One of your proposed rules is especially offensive and costly: "Pass a regulator-imposed test of your specialized investment knowledge" - is that a joke? I'm a 60 yr old man - I haven't taken a test since I got a permit to purchase a handgun 20 years ago - and that test is a state requirement, not a federal one. And what is this "cooling off period"? Who decides who needs cooled off, for how long, and for what reason?