Investments are risky business, so the investors must face it or they should leave this field. In this regard, investors should know best how to take care of themselves. In the proposal, the complex products and options are defined more riskier, no matter what which I can’t agree for two reasons.
The first, when talking investment risk, we need to have a benchmark. In equity market which is the proposal is talking about, stocks should be the benchmark since they are the bases for most complex products and options. When comparing with stocks, certain option products may not have more risk. For example, the uncovered put does not have more risk than own the underline stock assuming an investor owns the stock at the same strike price as the put seller.
The second, investment risk, in most cases, is the downside risk. If FINRA tries to protect individual investors, then certain complex products that trade investment upside return for downside protection should not be include in the proposal even they use complex investment strategy to achieve the goal. For individual investor, I would like to see there are more such products on the market, so I can invest some products that guarantees no negative return (monthly, quarterly or yearly) even I have to pay for the protection by reducing the positive return. I would like FINRA encourage investment firms to come up more such products than spending energy to think how to restrict investors’ choices or ability to invest.
On Request for Comment:
As an investor, the section 2 is more relevant.
After reading it, it seems to me that FINRA tries to limit individual investors to participate to invest in complex products and options.
a. The enhanced accounting approval process is another way to say that approve as little as possible.
b. Requirements that a customer complete training or a learning course before approval to trade in certain complex products. How as individual investor to get the training and who is going to provide it and how the brokerage firm to know if someone has finished the required training?
c. When individual investor applies to trade those products, the brokerage firms might be able to provide relevant materials through e-mail or online downloading.
d. Required customer attestations regarding knowledge and experience is nonsense if there is no one to check if it is true or not. If FINRA wants to check it, does FINRA want to give customer some kind exam?
e. Restrictions or limitations on retail customer access to complex products? This is too much government powers over individual freedom. Why government always thinks it is the best for individual investors? I understand that government tries to limit the loss and reduce risk, but by restrict our freedom is not the right way to go. Instead government should promote more saver products that are better for the investors.
Regards,
Ying Lin Comment On Regulatory Notice 22-08
Investments are risky business, so the investors must face it or they should leave this field. In this regard, investors should know best how to take care of themselves. In the proposal, the complex products and options are defined more riskier, no matter what which I can’t agree for two reasons.
The first, when talking investment risk, we need to have a benchmark. In equity market which is the proposal is talking about, stocks should be the benchmark since they are the bases for most complex products and options. When comparing with stocks, certain option products may not have more risk. For example, the uncovered put does not have more risk than own the underline stock assuming an investor owns the stock at the same strike price as the put seller.
The second, investment risk, in most cases, is the downside risk. If FINRA tries to protect individual investors, then certain complex products that trade investment upside return for downside protection should not be include in the proposal even they use complex investment strategy to achieve the goal. For individual investor, I would like to see there are more such products on the market, so I can invest some products that guarantees no negative return (monthly, quarterly or yearly) even I have to pay for the protection by reducing the positive return. I would like FINRA encourage investment firms to come up more such products than spending energy to think how to restrict investors’ choices or ability to invest.
On Request for Comment:
As an investor, the section 2 is more relevant.
After reading it, it seems to me that FINRA tries to limit individual investors to participate to invest in complex products and options.
a. The enhanced accounting approval process is another way to say that approve as little as possible.
b. Requirements that a customer complete training or a learning course before approval to trade in certain complex products. How as individual investor to get the training and who is going to provide it and how the brokerage firm to know if someone has finished the required training?
c. When individual investor applies to trade those products, the brokerage firms might be able to provide relevant materials through e-mail or online downloading.
d. Required customer attestations regarding knowledge and experience is nonsense if there is no one to check if it is true or not. If FINRA wants to check it, does FINRA want to give customer some kind exam?
e. Restrictions or limitations on retail customer access to complex products? This is too much government powers over individual freedom. Why government always thinks it is the best for individual investors? I understand that government tries to limit the loss and reduce risk, but by restrict our freedom is not the right way to go. Instead government should promote more saver products that are better for the investors.
Regards,
Ying