February 2, 2020
Item 1: General Identifying Information
a. Is the firm a Commission-registered investment adviser or a broker-dealer?: Yes
b. What is the size of the firm in terms of:
1.) The number of retail investors (as defined in the release)? 15000000
2.) For Investment Advisers, regulatory assets under management? 2000000000000
3.) For broker-dealers, regulatory net capital?
4.) Other (please specify)?
c. Please include any additional general identifying information that you wish to provide, that could add context to your other feedback on the proposal.
I am a veteran 21 year tenure Wealth Management Advisor with Merrill Lynch. I am not an order-taker. I am a certified Senior Portfolio Manager, authorized by my firm to manage portfolios for other Advisors their clients. This proposed rule would harm Americans result in less choice. This proposed rule further exacerbates our ability to serve our clients, in their pursuit of the financial goals reduces our capacity to provide them with peace of mind. Our system is currently broken, only in the sense that regulators have shared their opinion that leveraged investments are not good long-term investments have discouraged financial service firms from offering leveraged ETFs. These investments ARE, in fact, best suited for long term investing. I have a client that learned of them in 2009 we began employing them for him his family. He is a CIMA a highly-seasoned investor. Components of his portfolio are up over 3000%. We dont have all of his investments allocated to leveraged ETFs, but they do play a part in a DIVERSIFIED portfolio. Id be happy to testify more on this subject. Do not move forward with more regulation. Its not needed. Instead, if you do anything, propose, for instance, that investors have no more than 50% of their overall holdings in leveraged ETFs.
d. Does the firm accept orders from or place orders for the accounts of retail investors to buy or sell shares of leveraged/inverse investment vehicles (as defined in the proposed sales practices rules)?
Yes
Item 2: Cost to Comply with the Proposed Due Diligence and Account Approval Requirements
a. What do you expect the cost to your firm would be in order to comply with these proposed requirements (in terms of combined internal and external costs)?
1.) For an investment adviser (check one box): Greater than $10,000
2.) For a broker-dealer (check one box): Greater than $50,000
b. Are there any less expensive alternatives to the proposed requirements you can suggest that would still preserve the proposed rules intended investor protection safeguards?
Leveraged ETFs may play a role in a well-diversified portfolio. If you do anything, propose, for instance, that investors have no more than 50% of their overall holdings in leveraged ETFs.
Item 3: Other Feedback on Proposed Sales Practices Rules
Instructions: Please include any other additional suggestions or comments about the proposed sales practices rules that you would like to provide.
Leveraged ETFs may play a role in a well-diversified portfolio. If you do anything, propose, for instance, that investors have no more than 50% of their overall holdings in leveraged ETFs.