Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my comments on the proposed rule "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns regarding potential overreach of regulatory authority and the impact on small businesses. Firstly, I believe that the SEC's proposed rule may exceed its regulatory authority, encroaching on areas that should be regulated by other agencies. It is important to ensure that each regulatory body focuses on its specific area of expertise, without duplicating efforts or overstepping boundaries. By expanding the scope of the rule to include a broader range of investments held in a client's account, the SEC may inadvertently venture into the territory of other regulatory bodies, potentially leading to confusion and inconsistency in regulatory oversight. Furthermore, I am particularly concerned about the impact of the proposed rule on small businesses. The reporting requirements outlined in the rule would impose significant burdens on small advisory firms and start-ups. These businesses, which may not otherwise be required to track personal identifiable information, would be forced to implement tracking protocols, resulting in additional expenses. This could put small businesses at a disadvantage and stifle innovation in the industry. The compliance costs associated with the proposed rule could have a disproportionate impact on small firms with limited resources. These additional financial burdens may hinder their ability to compete in the market and provide valuable advisory services to clients. It is crucial to consider the potential unintended consequences of the rule on small businesses and explore alternative approaches that strike a balance between investor protections and the economic viability of small advisory firms. Moreover, the proposed rule's significant paperwork and recordkeeping requirements pose further challenges to small businesses. These reporting obligations demand substantial time and resources, diverting attention away from client service and impeding business growth. It is important for the SEC to assess the practicality and necessity of these requirements, ensuring that they truly contribute to investor protections without unduly burdening smaller firms. In conclusion, while I recognize the SEC's objectives in proposing the "Safeguarding Advisory Client Assets" rule, I urge the agency to carefully consider the potential overreach of regulatory authority and the disproportionate impact on small businesses. Implementation of the rule should not inhibit the growth and progress of small firms or create unnecessary redundancies in regulatory oversight. I encourage the SEC to seek a balanced approach that protects investors while fostering a vibrant and competitive advisory industry. Thank you for considering my concerns. Please feel free to contact me at asiHassan121@gmail.com if you have any questions or require further information. Sincerely, [REDACTED]