I believe the use of complex products including leveraged and inverse funds should continue to be allowed for use with retail investors for short-term purposes. Often these products can be used when volatility spikes within the markets in an effort to protect an investors portfolio. Through the use of these type of products, the investor is not required to sell specific holdings (incurring unnecessary capital gains) but can hedge their portfolio. Certainly, the use of these type of investments should be monitored to confirm prudent usage but should continue to be allowed. These type of products are no more confusing for an individual investor than the use of options (ie., calls and puts) which can be used in a similar fashion or for a similar purpose.
I appreciate the opportunity to provide comments regarding this issue.
Ronnie Rushing Comment On Regulatory Notice 22-08
I believe the use of complex products including leveraged and inverse funds should continue to be allowed for use with retail investors for short-term purposes. Often these products can be used when volatility spikes within the markets in an effort to protect an investors portfolio. Through the use of these type of products, the investor is not required to sell specific holdings (incurring unnecessary capital gains) but can hedge their portfolio. Certainly, the use of these type of investments should be monitored to confirm prudent usage but should continue to be allowed. These type of products are no more confusing for an individual investor than the use of options (ie., calls and puts) which can be used in a similar fashion or for a similar purpose.
I appreciate the opportunity to provide comments regarding this issue.