January 30, 2020
I believe Proposed Rule S7-24-15 is a bad rule. If the proposal is adopted, I would lose the benefit from the enhanced return and portfolio protection potential that leveraged and inverse funds provide by either being prevented from buying them or by being dissuaded from buying them as a result of an overly burdensome qualification process. It is also likely some brokerage firms will stop offering these funds altogether due to the difficulty of implementing the regulations. In addition, no on has demonstrated that there is a problem that needs to be solved with respect to leveraged and inverse funds. Why should these funds be treated any differently than the tens of thousands of other public securities, each with their own characteristics and risks? Finally, I don't like the precedent. Requiring me to qualify to purchase a security in the public markets would be an unjustified break with how the SECs regulation of the sale of securities in the public markets has worked for nearly 90 years. The proposal is at odds with our long-standing system that gives investors and their advisors the freedom to make their own investment decisions. This rule should not be adopted.