February 20, 2020
I strongly believe the proposed regulations are:
1. Bad for Investors. If the proposal is adopted, some investors who could benefit from the enhanced return and portfolio protection potential of leveraged and inverse funds could be prevented from buying them by an overly burdensome qualification process. Brokerage firms could even stop offering these funds altogether due to the difficulty of implementing the regulations.
2. Unnecessary. The SEC has not shown there is a problem that needs to be solved with respect to leveraged and inverse funds. The Commission has failed to show why these funds should be treated differently than tens of thousands of other public securities, each with their own characteristics and risks.
3. A Dangerous Precedent that will require me to pre-qualify in order to purchase a security in the public markets. Furthermore, this would be an unjustified break with how the Commissions regulation of the sale of securities in the public markets has worked for nearly 90 years. The proposal would be at odds with our long-standing system that gives investors and their advisors the freedom to make their own investment decisions.