I strongly disagree with the notion that more "guardrails" are needed for retail investors dealing in so-called "complex products." While some products are truly complex and require an investment of time for an investor to fully understand their risks and rewards, other products you name--particularly options--are not truly complex or difficult to understand with a modicum of study. All investing carries risk, even time tested buy-and-hold forever. Investing in individual stocks rather than mutual funds or ETFs carries additional risks, and should require additional due diligence by investors, but we do not see a proposal that investors who wish to buy individual stocks should be required to demonstrate an ability to conduct financial analysis or determine free cash flow. Contrary to your implied suggestion that retail investors would be better off consulting with professional brokers regarding "complex products" I believe this would actually open new opportunities for brokers to steer clients into investments that may not be suitable; every contact with a broker is a sales opportunity. And having been reassured by a broker about structured notes or long straddles a retail investor may actually feel more secure in transacting that trade than if the investor had conducted his own research. There will always be investors who shoot from the hip and put money on the line without understanding the risks of an investment; there will always be gamblers in the market. These people stand to lose considerable money, but they are making that choice. On the other hand, there are millions of retail investors who have taken the time to research, learn, and understand "complex" investments and utilize them prudently and profitably. A regulation sufficient protect the former from themselves will necessarily have a deleterious effect on the ability of the latter to continue profitably utilizing "complex" investment strategies. The question should be: why are we considering punishing the winners instead of simply letting the losers loose? The current level of regulation on retail investors already denies us substantial opportunities (see: the Accredited Investor rule). We don't need more regulation. We didn't ask for more regulation. We don't want more regulation. And the fact that some people insist on learning about risk the hard way does not justify more regulation. Thank you for your consideration.
For the Public
FINRA DATA
FINRA Data provides non-commercial use of data, specifically the ability to save data views and create and manage a Bond Watchlist.
For Industry Professionals
FINPRO
Registered representatives can fulfill Continuing Education requirements, view their industry CRD record and perform other compliance tasks.
For Member Firms
FINRA GATEWAY
Firm compliance professionals can access filings and requests, run reports and submit support tickets.
For Case Participants
DR PORTAL
Arbitration and mediation case participants and FINRA neutrals can view case information and submit documents through this Dispute Resolution Portal.
Need Help? | Check System Status
Log In to other FINRA systems
Sean Roberts Comment On Regulatory Notice 22-08
I strongly disagree with the notion that more "guardrails" are needed for retail investors dealing in so-called "complex products." While some products are truly complex and require an investment of time for an investor to fully understand their risks and rewards, other products you name--particularly options--are not truly complex or difficult to understand with a modicum of study. All investing carries risk, even time tested buy-and-hold forever. Investing in individual stocks rather than mutual funds or ETFs carries additional risks, and should require additional due diligence by investors, but we do not see a proposal that investors who wish to buy individual stocks should be required to demonstrate an ability to conduct financial analysis or determine free cash flow. Contrary to your implied suggestion that retail investors would be better off consulting with professional brokers regarding "complex products" I believe this would actually open new opportunities for brokers to steer clients into investments that may not be suitable; every contact with a broker is a sales opportunity. And having been reassured by a broker about structured notes or long straddles a retail investor may actually feel more secure in transacting that trade than if the investor had conducted his own research. There will always be investors who shoot from the hip and put money on the line without understanding the risks of an investment; there will always be gamblers in the market. These people stand to lose considerable money, but they are making that choice. On the other hand, there are millions of retail investors who have taken the time to research, learn, and understand "complex" investments and utilize them prudently and profitably. A regulation sufficient protect the former from themselves will necessarily have a deleterious effect on the ability of the latter to continue profitably utilizing "complex" investment strategies. The question should be: why are we considering punishing the winners instead of simply letting the losers loose? The current level of regulation on retail investors already denies us substantial opportunities (see: the Accredited Investor rule). We don't need more regulation. We didn't ask for more regulation. We don't want more regulation. And the fact that some people insist on learning about risk the hard way does not justify more regulation. Thank you for your consideration.