Skip to main content

Narayan Banerjee Comment On Regulatory Notice 22-08

Narayan Banerjee
N/A

I am capable of understanding leveraged funds and their risks. I do not need these measures imposed on me. However, some better disclosure from the providers could be helpful to the public. Disclosures could include:

1) Predetermined plans for reverse and forward splits: "We will reverse split this fund if the value falls under $x.yz for a period of _________ days."
2) Better explanations of beta slippage
3) Explanations of the total costs of the funds
4) Brokers providing warning notifications of oversized leveraged. E.g. "WARNING. 80% of your portfolio is composed of leveraged funds."

Limitations on options trading could also be helpful. Robinhood allowed me to buy options on leveraged funds and I lost money. This was not because of the leveraged funds, it was because Robinhood did not provide all the necessary information about trading options that I needed.

But please do not prevent me from accelerating my investment gains through leverage.