Index Universe is reporting that the The Financial Industry Regulatory Authority, has apparently changed its position on the crackdown of leveraged exchange-traded funds. Index Universe states, “On the FINRA Web site, regulators are now saying: “Leveraged and inverse ETFs can be appropriate if recommended as part of a sophisticated trading strategy that will be closely monitored by a financial professional. At times, this trading strategy might require a leveraged or inverse ETF to be held longer than one day.”

Last month, FINRA issued a notice warning advisers about the possible dangers of such financial instruments. (See notice here.) The regulatory body basically said that fiduciaries are failing to do their duties if they recommend that clients hold an inverse or leveraged ETF for periods longer than a day.

“While the customer-specific suitability analysis depends on the investor’s particular circumstances, inverse and leveraged ETFs typically are not suitable for retail investors who plan to hold them for more than one trading session, particularly in volatile markets,” said FINRA in June.”

For the full story click: HERE

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