Subject: File No. S7-24-15
From: james tharayil

December 15, 2015

Hi All,

Subject: Regarding the vote to shut down leveraged ETF (2X and 3X)

I heard in the news that SEC is planning to shut down leveraged and I would like provide few counter arguments against the decisions. I'm retail investor and I have been investing in leveraged ETF for the past 6 months. One of the biggest disadvantage with this decision is that I need to liquidate my investment at a loss.

When I started investing I completely know all the risk associated with the product. For instance, I created an internal excel sheet to compile the worst case scenario, for example i own Ticker "BRZU "which is 3X brazilian etc. If this ETF has to go down to Zero then the brazilian index has to correct more than 30% in a single day, which is unrealistic. Also, even over time it cannot be zero, because the ETF rebalances the leverage on a daily basis. Additionally, I own the ETF with the inverse ETF "BZQ" which reduces my risk significantly. I can email excel sheet if needed.

I agree there are risk associated with this product, but it is the duty of each retail investor to understand the risk before investing in the product. Also, before investing I had to sign a separate form with my broker and Proshares(one of the providers) sent me prospects which clearly showed that the investment of 3X will not necessary match the return offered by the product. I clearly agree there are things that brokers and providers can do to provide more understanding of the product. I agree that this is a risky product and the steps taken by SEC, but shutting down the product according to me is a mistake. I need to liquidate my investment at a loss, when I clearly understand the risk associated with the product. Also, one suggestion is to have an exception for retail investors who understand the risk. For instance, not all retail investors are allowed to trade naked options. But retail investors who understand the risk can. Similarly, allow retail investors with the knowledge to invest in the product. Another suggestion is have retail buy the two products simultaneously ( the leveraged and inverse leveraged simultaneously) For Example China ETF "YInn " 3 x and Yang 3X inverse, this reduces the risk significantly. Another suggestion is to eliminate 3X and only have 2x. These are all suggestion which I believe can reduce the risk of leveraged ETF's. I hope SEC takes a constructive ruling, rather than shutting down the funds. Hoping for the best.

James Tharayil