After a review, Morgan Stanley Smith Barney
has decided to impose restrictions on the sale of leveraged and inverse ETFs.
Company executives said that as of August 7, solicited purchases of the products will not be allowed in traditional brokerage accounts, while unsolicited purchases will be allowed, subject to "enhanced oversight and review."
Also, MSSB is no longer allowing purchases of the products in advisory accounts managed by Morgan Stanley Smith Barney Financial Advisors.
MSSB is the latest broker-dealer to create a policy on leveraged ETFs.
Company Press Release
NEW YORK, August 7, 2009 – In response to concerns raised by regulators about these
securities, Morgan Stanley Smith Barney announced today that it has placed certain restrictions
on the sale of leveraged, inverse, and leveraged inverse exchange traded funds (ETFs).
Specifically, as of August 7, 2009, solicited purchases of these products will not be permitted in
traditional brokerage accounts. Unsolicited purchases in these accounts will be permitted only
subject to enhanced oversight and review. In addition, no purchases of these securities will be
permitted in advisory accounts managed by Morgan Stanley Smith Barney Financial Advisors.
Financial Advisors have been encouraged to review existing positions in these securities with
clients to emphasize their unique characteristics and risks.
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