Oct. 29, 2023
ATTN: Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While I recognize the importance of enhancing investor protections and addressing gaps in the custody rule, I have several reservations about the potential negative impact of these rule proposals on the competitiveness of US companies and small businesses. Additionally, I believe that these rules may overemphasize revenue generation at the expense of the rule of law and judicial independence. First and foremost, I am concerned about the potential negative impact on the competitiveness of US companies in the global market. The proposed rules may put US companies at a disadvantage compared to their international counterparts. By imposing stricter regulatory requirements on investment advisers, particularly in regards to the safeguarding of client assets, it is possible that capital flight could occur, leading to a loss of market share for US companies. This could have adverse effects on job creation, economic growth, and industry innovation. Furthermore, I am worried about the impact the reporting requirements will have on small businesses, especially startups and other entities who may not otherwise be required to track personal identifiable information. The additional costs associated with implementing the necessary tracking systems could place these small businesses at a significant disadvantage and potentially stifle crucial innovation. As we look to promote entrepreneurship and foster a robust and dynamic business environment, it is essential to consider the burden that these regulations may impose on small entities. Alongside these concerns, I would also like to highlight the potential dangers of overemphasizing revenue generation at the expense of the rule of law and judicial independence. While it is crucial to ensure proper safeguards for client assets, it is equally vital to maintain a fair and impartial judicial system. Any regulations or practices that prioritize revenue generation over upholding the rule of law risk eroding public trust in the financial sector and undermining the integrity of our legal system. This delicate balance must be carefully considered throughout the rulemaking process. In conclusion, while I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I believe that the potential negative impact on the competitiveness of US companies and small businesses, as well as the risks associated with overemphasizing revenue generation, could have significant repercussions. I urge you to carefully review the concerns raised in this public comment and ensure that the final rule strikes a balance between safeguarding client assets and fostering a competitive and innovative market. Thank you for considering my comments, and I look forward to the SEC's thoughtful evaluation of these concerns.