Oct. 29, 2023
Dear Securities and Exchange Commission, I feel compelled to share my thoughts and concerns about the proposed rule on "Safeguarding Advisory Client Assets." While I understand the intention of enhancing investor protections and addressing gaps in the custody rule, I must express my reservations about the SEC's proposed rule and its potential overreach. One cannot help but question the timing of these regulations. The abrupt introduction of these rules without allowing sufficient time for companies and protocols to adapt and comply seems hasty and ill-advised. Rushed implementation may inadvertently undermine the very investor protections that the rule aims to strengthen. Perhaps a more thoughtful and collaborative approach, taking into account industry input, would yield better outcomes. Furthermore, I cannot ignore my apprehension about the potential impact of these regulations beyond US borders. Given the global nature of the investment industry, it is crucial for regulatory bodies to align and cooperate to establish consistent standards. It is incumbent upon the SEC to engage in meaningful discussions with international counterparts to prevent unintended consequences and conflicting regulations. In addition to these overarching concerns, I cannot overlook the cumbersome compliance costs that may be imposed on investment advisers as a result of these proposed regulations. While safeguarding client assets is undeniably important, it is equally critical to consider the operational viability of investment advisory firms, especially smaller entities. Imposing unnecessary and disproportionately burdensome compliance costs could adversely affect competition and disadvantage smaller players in the industry. Finally, I believe it is imperative for the SEC to establish a transparent and robust feedback mechanism throughout the implementation of these regulations. Actively seeking and incorporating input from market participants and industry experts will ensure that the rules are practical and effective, minimizing unintended consequences. Fostering an environment of collaboration and responsiveness will only serve to enhance the rulemaking process and ultimately benefit investors. Thank you for taking the time to consider my concerns regarding the proposed rule. I firmly believe that a more balanced and inclusive approach, mindful of regulatory authority, providing adequate transition periods, and considering the global impact, will result in more effective regulations to safeguard client assets. Sincerely, Henrique Sent with Proton Mail secure email.