Oct. 29, 2023
Subject: Comments on the SEC's Proposed Rule - Safeguarding Advisory Client Assets Dear Securities and Exchange Commission, I am reaching out to express my views on the U.S. Securities and Exchange Commission’s recent proposal, Safeguarding Advisory Client Assets, which was announced on February 15, 2023. I strongly advise that you participate actively in the public commentary procedure by utilizing the SEC's online platform ahead of the September 7, 2023, cutoff date. At first glance, it seems like an admirable attempt to shield investors' possessions from mismanagement; nevertheless, I believe that the plan requires cautious assessment because of its probable ramifications on various aspects of the general populace's welfare. To begin with, one of the most significant issues with this suggested regulation is the potential rise in expenditure for end users arising from the demands for periodic surprise audits of external custodians managing customer monies. Many low-income individuals depend heavily on less expensive investment counseling choices. Any hike in costs will make it harder for them to access critical financial assistance. Furthermore, some critics wonder if this proposed legislation is superfluous given the similarity between it and another previous measure, namely the Private Fund Adviser Audit Rule, which has recently been put into force. There is growing apprehension over the possibility of regulatory overlaps, leading to unnecessary complexity and confusion. Since numerous enterprises function globally, it becomes imperative to evaluate these two policies together to ascertain their compatibility with each other's aims. Last but not least, I bring forth the issue of how this proposed law might adversely influence long-term economic progress prospects. Small asset management companies may face difficulties sustaining compliance costs linked with this proposal's provisions. This circumstance could curb innovation and entrepreneurial ambition, thereby impairing future capital creation chances. In light of these concerns, I beseech the SEC to proceed judiciously while developing responses to this suggestion. All important factors should receive due attention and consideration. As a concerned citizen, I remain committed to contributing positively to the ongoing debate surrounding this topic through detailed feedback submitted well before the September 7, 2023, deadline. If necessary, please feel free to reach me directly for additional information. Thank you for considering my perspective. I hope this communication finds you in good health. Warm Regards, Alexander Schmitt