I believe levaraged investments help offset losses in other securities. Without leveraged investments it could radically move my account into losses. Also hedging is especially useful to avoid losses since I can offset losses. With leverage and hedging taken away that would also reduce liquidity and so increase voltility. It would be a very bad move to take away these useful tools.
Ronald Stark Comment On Regulatory Notice 22-08
I believe levaraged investments help offset losses in other securities. Without leveraged investments it could radically move my account into losses. Also hedging is especially useful to avoid losses since I can offset losses. With leverage and hedging taken away that would also reduce liquidity and so increase voltility. It would be a very bad move to take away these useful tools.