Why does FINRA contemplate taking up a "mother hen" position with respect to "complex products" such as leveraged ETFs? There are no guarantees with respect to any investment strategy, and it is easy to lose a fortune in any number of market instruments -- including standard stock and mutual fund trades.
If an investor does not have the knowledge or understanding of the risks of investing, that is a problem for the investor not FINRA. Placing ridiculous "guardrails" on the "complex product" market leads investors to believes that it is the responsiblity of regulators to guarantee investor outcomes.
Furthermore, regulatory restrictions on the trading of complex products will reduce liquidity and further damage the performance of the products themselves.
Investors should be provided with a mandatory prospectus for any product they choose to invest in, and that's it. Wise investors will read the prospectus, do their research, and invest wisely. Foolish investors will blunder into products they don't understand and loose money. That is the nature of the market, investing, and life.
Mike Erickson Comment On Regulatory Notice 22-08
Why does FINRA contemplate taking up a "mother hen" position with respect to "complex products" such as leveraged ETFs? There are no guarantees with respect to any investment strategy, and it is easy to lose a fortune in any number of market instruments -- including standard stock and mutual fund trades.
If an investor does not have the knowledge or understanding of the risks of investing, that is a problem for the investor not FINRA. Placing ridiculous "guardrails" on the "complex product" market leads investors to believes that it is the responsiblity of regulators to guarantee investor outcomes.
Furthermore, regulatory restrictions on the trading of complex products will reduce liquidity and further damage the performance of the products themselves.
Investors should be provided with a mandatory prospectus for any product they choose to invest in, and that's it. Wise investors will read the prospectus, do their research, and invest wisely. Foolish investors will blunder into products they don't understand and loose money. That is the nature of the market, investing, and life.