FINRA’s Regulatory Notice 22-08 includes a solicitation of comments on investors’ ability to trade “complex products”—including leveraged and inverse funds (“L&I Funds”).
In its notice, FINRA articulates the “concern” that investors may be confused by “complex products” and solicits comment as to whether limiting access to such products might be appropriate given the growth in self-directed investment platforms.
FINRA is not currently proposing new rules, but suggests “enhancements” to current rules that may require onerous processes for brokerage firms in order to qualify legally entitled investors to use L&I Funds and other “complex products.”
At Direxion, and throughout the investment industry, we understand that educated investors are our best customers. Rather than limiting investor choice, we believe that investor education, transparency and risk disclosure should be the primary focus of FINRA and the industry.
FINRA seeks public comment, and Direxion encourages you to do so prior to the deadline on May 9. Please be thoughtful, comprehensive and detailed in your comments. You may want to consider addressing the following:
Thank you for your attention to this important matter, and your continued trust in Direxion.
All Direxion leveraged and inverse ETFs are intended only for investors with an in-depth understanding of the risks associated with seeking leveraged investment results, and who plan to actively monitor and manage their positions. There is no guarantee that these L&I Funds will meet their objective. Please visit the Direxion Leveraged and Inverse ETF Education Center, where you will find educational brochures, videos, and a self-paced online course to help you understand if leveraged ETFs are right for you.
Direxion equips investors who are driven by conviction with ETF solutions built for purpose and fine-tuned for precision. These solutions are available for a broad spectrum of investors, whether executing short-term tactical trades, or investing in thematic strategies. Direxion’s reputation is founded on developing products that precisely express market perspectives and allow investors to manage their risk exposure. Founded in 1997, the company has approximately $28.6 billion in assets under management as of March 31, 2022. For more information, please visit www.direxion.com.