Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule, "Safeguarding Advisory Client Assets," which aims to enhance investor protections and address gaps in the custody rule. As an investor, I appreciate the SEC's efforts to ensure the safety of client assets held by investment advisers. However, I have a concern regarding the potential interactions between the proposed rule and monetary policy. Monetary policy plays a crucial role in shaping the economy, and any regulatory changes should carefully consider their impact on key economic factors such as inflation, economic growth, and financial stability. As the proposed rule introduces new requirements and compliance costs for investment advisers, it is important to assess how these changes may interact with monetary policy measures implemented by central banks. One potential concern is the unintended consequence of increased compliance costs leading to higher fees charged by investment advisers. If advisers pass on these costs to their clients, it could have an inflationary effect. This could be particularly worrisome in an environment where central banks are already grappling with inflationary pressures and trying to maintain price stability. Moreover, the proposed rule could have implications for economic growth. Investment advisers play a crucial role in allocating capital to support business expansion and innovation. By increasing compliance costs, the rule may make it more challenging for advisers, particularly small entities, to provide their services effectively. This could potentially hinder economic growth and stifle entrepreneurial activity. Lastly, the proposed rule should consider its potential impact on financial stability. The efficient functioning of the financial system relies on the smooth flow of capital and effective risk management practices. While safeguarding client assets is of utmost importance, the rule should carefully balance the need for protection with the need for a dynamic and resilient financial system. Excessive compliance burdens could divert resources away from risk assessment and management, potentially increasing systemic risks. In conclusion, while I support the goal of enhancing investor protections through the proposed rule, it is essential to consider the potential interactions between the rule and monetary policy. A thorough assessment of the impact on inflation, economic growth, and financial stability should be undertaken to ensure that the benefits of the rule outweigh any unintended consequences. I appreciate the SEC's commitment to soliciting public comments and providing an opportunity for stakeholders to express their concerns and suggestions. Thank you for considering my comment. Sincerely, R. Robinson Sent with Proton Mail secure email.