Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule titled "Safeguarding Advisory Client Assets." While I recognize the importance of enhancing investor protections and addressing gaps in the custody rule, I have reservations about potential overreach of regulatory authority and the impact on small businesses. Firstly, I would like to address the potential overreach of regulatory authority. It is essential to ensure that the SEC's proposed rule does not exceed its regulatory authority, encroaching on areas that should be regulated by other agencies. The safeguarding of client assets is undoubtedly crucial, but it is equally important to maintain a proper balance and not infringe upon the jurisdiction of other regulatory bodies. Secondly, I am concerned about the impact on small businesses. The reporting requirements outlined in the proposed rule would place a considerable burden on small businesses and startups who would not otherwise be required to track personal identifiable information. Implementing such tracking systems would incur additional costs for these entities, potentially straining their limited resources. This, in turn, could place small businesses and startups at a disadvantage and stifle innovation within the industry. It is crucial to consider the long-term effects of imposing such requirements on these smaller entities, as they play an essential role in fostering competition and driving economic growth. Furthermore, the associated costs of compliance may discourage small businesses from entering the market or hinder their ability to grow and scale. We must carefully assess the potential unintended consequences and disproportionate impact on small entities resulting from the proposed rule. In conclusion, while I appreciate the objective of enhancing investor protections and addressing gaps in the custody rule, I am concerned about the potential overreach of regulatory authority and the impact on small businesses. The reporting requirements outlined in the proposed rule may impose undue burdens and additional costs on these entities, potentially stifling innovation and hindering their ability to compete. I urge the SEC to critically review the potential implications of the proposed rule, taking into consideration the concerns raised by small businesses and startups. It is vital to strike a balance that achieves the regulatory objectives without disproportionately burdening smaller entities and impeding economic growth. Thank you for considering my comments. I believe that an open dialogue and careful consideration of various perspectives is essential to formulating sound regulations that benefit both investors and the industry as a whole. Sincerely, Garry G