Warning: Rule #22-08 is currently the subject of a deceptive advertising attack. Let's play "which of these is not like the others": * Target Date Funds * Funds using cryptocurrency futures * Reverse Convertible Notes * Volatility-Linked Funds The answer is "Target Date Funds". I don't use this, I don't intend to use this; but it's an old tool that's well understood and is being used as the first item on the list of the advertising campaign. I read the actual rule and could find no rule opposing. I could guess the why and the why might be "funds selling short" are the actual target here. Ad lists the following: Target Date Funds Non-Traditional Index Funds (Smart Beta + ESG) Emerging Market Funds High Yield Bond Funds Closed-end Funds Commodity Funds Cryptocurrency Funds Unconstrained Bond Funds Floating-rate/Leveraged Loan Funds Leveraged/Inverse Products Interval Funds Global Real Estate Funds ETNs Variable Annuities Defined Outcome ETFs Volatility-Linked Funds Currency Funds Funds using cryptocurrency futures Non-traded REITs Business Development Companies Opportunistic and Tactical, Multi-Strategy Funds Funds using derivatives for hedging or leverage Principal Protected Notes Structured Notes Asset-Backed Securities Funds Selling Short Start-up Company (IPO) Funds Funds Investing in Unlisted Securities Distressed Debt Funds Absolute Return Funds Finds of Hedge Funds Reverse Convertible Notes Market-linked CDs Range Accrual Notes Insurance-Linked Securities The following should not be taken away: Target Date Funds High Yield Bond Funds Floating-rate/Leveraged Loan Funds (a dangerous tool but people are wise enough to understand leveraged is outsized risk) Cryptocurrency Funds (don't take away unless you want the law to be ignored because that's what's going to happen) Absolute Return Funds Market-linked CDs (so it's a poor return. leave it.) The following should be taken away: Inverse Products (same reason as direct selling short is currently restricted) Funds using derivatives for hedging or leverage Global Real Estate Funds (outsized systemic risk) Funds using cryptocurrency futures (scam alert!) Distressed Debt Funds (outsized systemic risk) The following need to be limited to a max asset of fund before being restricted (say thirty percent although you can probably get a good number better than I can): Funds Selling Short Funds Investing in Unlisted Securities Volatility-Linked Funds
Joshua Hudson Comment On Regulatory Notice 22-08
Warning: Rule #22-08 is currently the subject of a deceptive advertising attack. Let's play "which of these is not like the others": * Target Date Funds * Funds using cryptocurrency futures * Reverse Convertible Notes * Volatility-Linked Funds The answer is "Target Date Funds". I don't use this, I don't intend to use this; but it's an old tool that's well understood and is being used as the first item on the list of the advertising campaign. I read the actual rule and could find no rule opposing. I could guess the why and the why might be "funds selling short" are the actual target here. Ad lists the following: Target Date Funds Non-Traditional Index Funds (Smart Beta + ESG) Emerging Market Funds High Yield Bond Funds Closed-end Funds Commodity Funds Cryptocurrency Funds Unconstrained Bond Funds Floating-rate/Leveraged Loan Funds Leveraged/Inverse Products Interval Funds Global Real Estate Funds ETNs Variable Annuities Defined Outcome ETFs Volatility-Linked Funds Currency Funds Funds using cryptocurrency futures Non-traded REITs Business Development Companies Opportunistic and Tactical, Multi-Strategy Funds Funds using derivatives for hedging or leverage Principal Protected Notes Structured Notes Asset-Backed Securities Funds Selling Short Start-up Company (IPO) Funds Funds Investing in Unlisted Securities Distressed Debt Funds Absolute Return Funds Finds of Hedge Funds Reverse Convertible Notes Market-linked CDs Range Accrual Notes Insurance-Linked Securities The following should not be taken away: Target Date Funds High Yield Bond Funds Floating-rate/Leveraged Loan Funds (a dangerous tool but people are wise enough to understand leveraged is outsized risk) Cryptocurrency Funds (don't take away unless you want the law to be ignored because that's what's going to happen) Absolute Return Funds Market-linked CDs (so it's a poor return. leave it.) The following should be taken away: Inverse Products (same reason as direct selling short is currently restricted) Funds using derivatives for hedging or leverage Global Real Estate Funds (outsized systemic risk) Funds using cryptocurrency futures (scam alert!) Distressed Debt Funds (outsized systemic risk) The following need to be limited to a max asset of fund before being restricted (say thirty percent although you can probably get a good number better than I can): Funds Selling Short Funds Investing in Unlisted Securities Volatility-Linked Funds