April 17, 2020
The proposal is bad for investors. If adopted, investors who could benefit from the enhanced return and portfolio protection of leveraged and inverse funds could be prevented from doing so due to an overly burdensome process. It could prompt brokerage funds to not offer such funds due to the difficulty of implementing the regulations. The proposal is unnecessary, the SEC has not shown there is a problem that needs to be solved with respect to leveraged and inverse funds. They have failed to show how these funds should be treated differently than thousands of other public securities, each having their own characteristics and risks. Adopting the proposal would set a dangerous precedent. Requiring investors to qualify to to purchase securities in the public markets would be an unjustified break with how the SEC's regulation of the sale of securities in the public markets has worked for over 90 years. The proposal is at odds with our long standing system that gives investors and their advisors the freedom to make their own investment decisions. The proposal fundamentally constrains the free market and capitalism accordingly. I personally, am capable of understanding leveraged and inverse funds and their performance characteristics, just as I am with any other investment instrument. I do not need a third party evaluating my ability to do so and potentially preventing me from buying such. I am for preserving the long-standing free public markets where investors and their advisors have the freedom to buy public securities without additional government- imposed limitations on investor choice.