May. 9, 2023
SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 275 and 279 Release No. IA-6240; File No. S7-04-23 RIN 3235-AM32 Safeguarding Advisory Client Assets AGENCY: Securities and Exchange Commission. ACTION: Proposed rule. Comments: RE: Page 28. should include "counterfeit short positions" for accounting purposes. RE: #220 Page 200. Yes the safeguarding rule should require audited financial statements of an entity to be distributed to all the entity's investors within 120 days. Other conditions should apply in the case of suspected counterfeit shares or short selling or suspected fraud. RE: #222 page 201. Investors should be able to request the audited financial statement to investors upon request for entities which they are invested. This includes for attorneys of the investors in the case of fraud and/or short sales and/or counterfeit shares. RE: #226 Yes allow investors of money market funds/investments to see audit. RE: #270 Should have a note that counterfeit short positions should not exist within the entity. In protecting the client should be notified and asked if it is agreeable for entity to short the client's shares, securities or other positions. Shorting a position should not take place without client consent and have a specific line item question in agreement with adviser and entity. RE: P287. No liens unless authorized in writing, should include not entity should make a lien against a clients shares/securities to include short sales or counterfeit shorts. The rules regarding shorts and counterfeit shorts/shares needs to be spelled out as entities have had a history of circumventing rules to allow for counterfeit shares/securities to be sold or used as a lien, Best Regards, Kimberly Christensen