Oct. 30, 2023
Here are some arguments against File Number S7–04–23 Against the 1 business day deposit requirement: This could create liquidity issues for some advisers who need flexibility in timing of deposits. One business day may be too rigid. Advisers with operations across multiple time zones could find this rule challenging to comply with. The current "prompt deposit" rule provides flexibility - defining 1 business day as the requirement may be excessive. Against the mandatory account examinations: This could significantly increase costs for advisers, especially smaller firms, to hire independent accountants to conduct examinations every year. Examinations are burdensome and is not be the most effective way to detect fraud or prevent misuse of client assets. The exemption criteria for advisers to avoid the exam mandate are unclear and could be difficult to meet. Against standardized account statements: This takes away flexibility from custodians to tailor statements to their business models and client needs. Standardization will result in less clarity if firms must conform to a rigid format rather than present information logically. There may not be a major need for standardization if current statements already contain the required details. In general, the arguments focus on increased costs and burdens for advisers versus uncertain benefits in terms of better protecting clients from fraud or loss of assets.