Oct. 30, 2023
Dear Securities and Exchange Commission, I appreciate the opportunity to provide my feedback on the proposed rule "Safeguarding Advisory Client Assets." As a concerned citizen and supporter of a fair and transparent financial industry, I would like to share my thoughts on the matter. First and foremost, I believe it is crucial to acknowledge the importance of investor protection and the prevention of potential asset loss. The proposed rule aims to enhance safeguards and address gaps in the current custody rule. By expanding the coverage to include a broader range of investments and ensuring that client assets are segregated from advisers' assets, this rule seeks to uphold the integrity of the investment advisory industry. I find it particularly noteworthy that the proposed rule recognizes the unique challenges posed by certain types of assets, such as crypto assets. By addressing these challenges and requiring enhanced recordkeeping, separation of duties, and regular reviews, the rule demonstrates a proactive approach to asset protection in the evolving landscape of investment advising. Moreover, the amendments to the surprise examination requirement and investment adviser recordkeeping rule reinforce the need for transparency and accountability. These changes, coupled with the proposed updates to Form ADV, aim to improve oversight and regulatory scrutiny. By reporting custody of client assets and providing information about custodians and accountants involved in safeguarding assets, the proposed changes enhance transparency and facilitate more robust regulatory supervision. While I understand that compliance with these proposed rules may impose certain costs on investment advisers, the potential benefits far outweigh them. In the interests of investor protection and market integrity, it is essential that advisers prioritize the safeguarding of client assets. The proposed rule strikes a reasonable balance between these objectives and compliance costs, with the SEC openly welcoming input on potential alternative approaches. In summary, I commend the SEC for its efforts to enhance investor protections through the proposed rule "Safeguarding Advisory Client Assets." By closing gaps in the custody rule, expanding coverage, and addressing challenges posed by various assets, the rule demonstrates a commitment to upholding market integrity and ensuring transparency. I support the SEC's request for public comments and urge all stakeholders to contribute to this important dialogue. Thank you for your attention to this matter. Sincerely, Dace Northal