You guys should not classify Retail Investors as a naïve person. Nowadays, Retail Investors have access to information to self-educate themselves on risks of trading leverage products (eg: Google Search, Reddit, Boggle heads and list goes on). I personally hold TQQQ for more than 2 years and will continue to do so as it continues to provide outsized return relative to underlying index. The examples quoted (2008-2009 timeframe) in the notice are cherry-picked to lay a negative shade on these products, one can pick a different date range to argue the other way. I have ACCEPTED the RISKs that come with these complex products and want to continue to hold them in the hopes to attain outsized returns. Please do not regulate these out or make them tough to buy and hold for long term. If you guys add additional oversight or systematic enforcement to Leverage ETFs for 1 day only hold period, you will be killing American Dreams of many Retail Investors. Bull Leverage ETFs are the only insider access a regular Retail Investor has to institutional-grade investment vehicles who are betting BIG on American Innovation Engine aka 3xNasdaq100 (TQQQ) or 3xSemi's (SOXL). Let me ask you guys this : Why does an Individual with $5M -$10M+ net worth can sign Index Swaps with JP Morgan via Private Wealth Mgmt and not a regular person like me? Also I see a comment on additional oversight in EU, Let me be clear, EU is far more progressive and liberal on leverage products. Retail Investor can easily buy 5X Nasdaq-100, 3X Tesla Bull and so on ETPs in UK. These products are not possible in USA as SEC regulated them out. Retail Investor can even buy 8x Tesla Constant Leverage Cert in Swiss Exchange, There is more innovation in EU in this space than in US. If you guys do decide to move forward with exam as a requirement to hold leverage products then in my humble opinion, you should allow for higher leverage products (3x or more) and provide access to more complex products like credit default swaps (CDS) in the US marketplace just like EU.
J Chimni Comment On Regulatory Notice 22-08
You guys should not classify Retail Investors as a naïve person. Nowadays, Retail Investors have access to information to self-educate themselves on risks of trading leverage products (eg: Google Search, Reddit, Boggle heads and list goes on). I personally hold TQQQ for more than 2 years and will continue to do so as it continues to provide outsized return relative to underlying index. The examples quoted (2008-2009 timeframe) in the notice are cherry-picked to lay a negative shade on these products, one can pick a different date range to argue the other way. I have ACCEPTED the RISKs that come with these complex products and want to continue to hold them in the hopes to attain outsized returns. Please do not regulate these out or make them tough to buy and hold for long term. If you guys add additional oversight or systematic enforcement to Leverage ETFs for 1 day only hold period, you will be killing American Dreams of many Retail Investors. Bull Leverage ETFs are the only insider access a regular Retail Investor has to institutional-grade investment vehicles who are betting BIG on American Innovation Engine aka 3xNasdaq100 (TQQQ) or 3xSemi's (SOXL). Let me ask you guys this : Why does an Individual with $5M -$10M+ net worth can sign Index Swaps with JP Morgan via Private Wealth Mgmt and not a regular person like me? Also I see a comment on additional oversight in EU, Let me be clear, EU is far more progressive and liberal on leverage products. Retail Investor can easily buy 5X Nasdaq-100, 3X Tesla Bull and so on ETPs in UK. These products are not possible in USA as SEC regulated them out. Retail Investor can even buy 8x Tesla Constant Leverage Cert in Swiss Exchange, There is more innovation in EU in this space than in US. If you guys do decide to move forward with exam as a requirement to hold leverage products then in my humble opinion, you should allow for higher leverage products (3x or more) and provide access to more complex products like credit default swaps (CDS) in the US marketplace just like EU.