Subject: File No. S7-24-15
From: Sam Bills

March 14, 2020

As a partner and principal in Bills Asset Management (an RIA firm based in Nashville, Tn), I have been an advisor over the last 20 years. During that time, I have seen the bear market of 2000-2002, the ensuing bull market, the great recession of 2007-2008, and the long bull market that followed. I am also currently involved in assisting my clients in managing the risk involved in the current coronavirus crisis. I don't often comment on proposed SEC rules but felt compelled to comment on the proposed regulations in regards to the purchase and sale of leverage and inverse funds. Through both bull markets and bear markets, good markets and bad ones, our firm has used both leverage and inverse funds to manage risk and enhance returns for our 200 clients and their 55 million in assets. The use of inverse funds assist us, and ultimately our clients, in reducing risk in uncertain times by hedging our portfolios from losses in volatile markets. The use of leverage funds assist us, and ultimately our clients, in increasing returns in markets where risk is more limited. Both inverse and leverage funds serve a vital part of our management of both risk and returns for our clients. The proposed regulations would be unwieldy at best and our continued use of these funds would not be feasible. At best, we would be forced to seek out more costly alternatives and, in our view, more complicated and less effective. At worst, we would be deprived of investment tools that better serve our clients. I believe, the net result would be the antithesis of what the SEC is trying to do
- depriving individual investors from tools to manage risk and responsibly enhance returns. I believe the current proposed regulations are unnecessary as I have seen no evidence that a problem exists (it certainly does not in our firm). Clients of ours hire us to perform a service for them - provide reasonable rates of return and to manage risk in doing so. The use of both leveraged and inverse funds have been invaluable to us over our entire 28 year firm history and certainly over the 20 years that I have been a principal. I sincerely believe that our clients will be the net loser in the proposed regulations as they will be denied easy access to tools that benefit them in both good times and bad. I appreciate the opportunity to share my thoughts and sincerely hope that you will reconsider these unnecessary, costly and harmful regulations.