February 21, 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
2. Unnecessary. The SEC has not shown there is a problem that needs to be solved with
respect to leveraged and inverse funds. They fail 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. Requiring investors 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 would be at
odds with our long-standing system that gives investors and their advisors the freedom to
make their own investment decisions.