Oct. 29, 2023
Re: Proposed Rule - Safeguarding Advisory Client Assets Dear Commissioners, I am writing to express my concerns regarding the proposed rule titled "Safeguarding Advisory Client Assets". While I understand and appreciate the SEC's commitment to ensuring the safety and transparency of client assets managed by advisers, I believe there are several implications that need reconsideration: Increased Costs: The proposed rule might inadvertently lead to higher operational costs for advisers. Such costs often trickle down to clients, making advisory services more expensive and possibly out of reach for some. Complexity for Small Advisers: Smaller advisers, who may not have the resources of larger entities, might find it challenging to navigate the added layers of regulation. This complexity could disadvantage them in the market. Potential Over-regulation: The advisory industry is already subject to stringent regulations. Introducing more rules could stifle innovation and flexibility, potentially impeding the market's natural evolution. Efficacy Concerns: The primary goal is to ensure the safety of client assets. However, it's uncertain if the proposed rules will effectively prevent fraud or wrongdoing. We should avoid measures that give a false sense of security without addressing the real issues. Conflicts with Other Rules: Considering the concurrent introduction of other regulations, like the private fund adviser audit rule, there might be unforeseen conflicts or ambiguities which could make compliance unnecessarily challenging. Administrative Burden: The increased paperwork and administrative responsibilities might detract advisers from their primary role - that of serving their clients' best interests. I kindly urge the Commission to take these concerns into consideration before finalizing any decisions related to the proposed rule. It's crucial to strike a balance between regulation and allowing the industry to function efficiently for the benefit of all stakeholders. Thank you for your time and attention. I am hopeful that the SEC will continue its tradition of thoughtful and balanced regulation. Sincerely, ~ Yuriy Zubyk