May 10, 2020
I am in great opposition to the newly proposed rule by the SEC.
The risks of LI Funds, including the risk associated with
holding these daily beta products for longer periods of time are always included in a summary prospectus when a trader buys stocks of these funds.
I do not believe that any intelligent investor or trader who purchases these products fail to regularly check them due to their inherent nature of high risks. I monitor my investments in leveraged funds almost daily through my broker. I take necessary action to limit risk when needed.
The SEC has already taken tough stances on on margin trading and PDT, therefore severely limiting the amount of leverage that retail traders or investors can borrow. Given that these measures are in place, I do not see the need to further limit the potential growth of retail traders/investors by restricting their purchase of LI funds.
In the case that the SEC goes ahead and enforces the rule, any prior user of LI Funds should automatically qualify for future trading of LI Funds. This is easily understandable from how traders who profit from the funds should automatically be classified as being capable of evaluating the risks.
Simply stated I strongly believe that traders/investors of LI funds are capable of assessing their risk and do actually know what they are buying into. As such, I oppose the enforcement of this newly proposed regulation.