Oct. 23, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets." While I acknowledge the importance of enhancing investor protections and addressing gaps in the custody rule, I have some concerns regarding the scope of the rule and its potential impact on international transactions. Under the proposed rule, there are certain assets that cannot be maintained with a qualified custodian. While I understand the need for enhanced recordkeeping, separation of duties, and regular reviews for these assets, I am concerned about the restrictions placed on advisors who may need to transact with other countries. Transacting with other countries is a common practice in today's global economy, and it is important for investment advisers to have the flexibility to engage in cross-border transactions when necessary. By limiting the ability to maintain assets outside of qualified custodians within the United States, the proposed rule could hinder advisors' ability to effectively manage client assets in a global market. In my opinion, the proposed rule should provide exceptions or alternative mechanisms for investment advisers to safeguard assets in situations where transacting with other countries is necessary for their clients' best interest. This could include allowing advisors to maintain assets with qualified custodians who are based in other countries, but still meet the necessary regulatory requirements and provide adequate investor protections. Furthermore, it is essential to consider the potential unintended consequences of restricting international transactions. By limiting opportunities for investment advisers to transact with other countries, the proposed rule could unintentionally result in reduced investment options, limiting diversification opportunities for clients and potentially impeding capital formation. I believe it is crucial to strike a balance between investor protections and facilitating global transactions. The proposed rule should consider the needs and best interests of clients who may have international investment portfolios. This could be achieved through the inclusion of provisions that allow for flexibility in safeguarding assets using qualified custodians based in other countries, provided they meet the necessary regulatory requirements. In conclusion, while I support the SEC's efforts to enhance investor protections and address gaps in the custody rule, I urge careful consideration of the potential impact of the proposed rule on international transactions. It is vital to strike a balance that protects investor assets while still facilitating global market participation and diversification opportunities. Thank you for considering my concerns and incorporating them into your considerations during the comment review process. Sincerely, Bobby Comber