Oct. 30, 2023
Radoslaw Napierala Francuska 48/18 41923 Bytom Polen Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the current custody rule, there are certain aspects of the proposal that raise concerns about potential overreach of regulatory authority. One area of concern relates to privacy and the safety associated with allowing numerous third parties to have access to sensitive financial data and social security numbers. The proposed rule includes requirements for investment advisers to provide clients' custodian information, including account numbers, which could increase the risk of sensitive information falling into the wrong hands. It is crucial to prioritize the privacy and security of client information to maintain public trust and confidence in the financial system. Moreover, I worry about the potential overlap of authority between the SEC and other regulatory agencies. While the SEC has a vital role in protecting investors, it is important to ensure that regulatory authority is appropriately delegated to other agencies that may have more specific expertise in certain areas. A careful review should take place to ensure that the proposed rule does not exceed the SEC's regulatory authority and encroach on areas that should be regulated by other agencies. Furthermore, the economic analysis provided by the SEC raises questions about the extent of the burdens imposed on investment advisers. The estimated compliance costs and hour burdens associated with the proposed rule could disproportionately impact smaller advisers, potentially creating a barrier to entry and hindering competition in the investment advisory industry. It is crucial to strike a balance between enhancing investor protections and imposing undue burdens on small entities. I also urge the SEC to consider the potential unintended consequences of the proposed rule. While the rule aims to enhance investor protections, it is important to evaluate the potential impact on market efficiency and capital formation. Excessive regulations and compliance costs could impede the ability of investment advisers to operate efficiently, potentially reducing the availability of investment opportunities for both advisers and investors. Moreover, I encourage the SEC to explore reasonable alternatives to the proposed rule. It is important to consider innovative solutions that achieve the objective of safeguarding client assets while minimizing unnecessary compliance costs. Stakeholders should be given the opportunity to propose alternative approaches that may achieve the desired outcome without unduly burdening industry participants. In conclusion, while I support the goal of enhancing investor protections and addressing gaps in the custody rule, I have concerns about potential overreach of regulatory authority, privacy implications, and the economic burdens imposed by the proposed rule. It is crucial for the SEC to carefully evaluate and address these concerns to ensure the rule strikes the right balance between investor protections and regulatory efficiency. Thank you for considering my comment. I appreciate the opportunity to provide feedback on this important proposal. Sincerely, Radoslaw Napierala