Direxion releases a letter opposing alarming new proposed SEC restrictions on leveraged ETFs.
“The proposed regulations, if adopted by the SEC, will require you to provide extensive financial and personal information to your brokerage firm or financial advisor who, after review and evaluation of your financial and personal information, will decide for you whether you are sufficiently “capable of evaluating the risks” of using L&I Funds. It is possible that you will not be permitted to continue to use L&I Funds if your brokerage firm or financial advisor deems you “incapable” of adequate risk assessment—even if you affirmatively represent that you understand and accept the risks of L&I Funds. The proposed Rules also may cause brokerage firms to cease offering L&I Funds given the unprecedented and burdensome due diligence requirement.”
“The belief that investors cannot be trusted to understand clearly disclosed risks is an unprecedented, alarming and notable departure from the bedrock principles of the capital markets and of how the SEC regulates the offering of other securities.”