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Patrick McGraw Comment On Regulatory Notice 22-08

Patrick McGraw
N/A

Regarding your considered regulation, I strongly oppose having index and reverse index ETFs having anything to do with it.

While I see some merit in making sure retail investors fully understand risks before directly trading on margin or shorting a stock, the proposal to restrict index/reverse index ETF investors is completely meritless; theres no specialized knowledge required to let the ETFs manager handle the complexities of tracking markets direction.

In fact, your inclusion of carveouts for high net worth investors, and the inaction on real abuses (like high frequency trading and payment for order flow) certainly make it seem as if your proposed regulation is less about the public good and more about shutting out the little guy from the types of investing only high net worth individuals historically had access to.

Restricting index-tracking ETFs as part of a regulation will erode trust in your agency and its motives. Respectfully, let us make my own investment decisions for easily-comprehensible index and reverse index funds.