Greater than two dozen commerce teams urged the Securities and Alternate Fee Tuesday to not undertake its Safeguarding Advisory Shopper Belongings proposal “in its present kind.”

The 26 teams — which embrace the Securities Business and Monetary Markets Affiliation, Monetary Companies Institute and the Funding Firm Institute — informed SEC Chairman Gary Gensler in a letter that the company ought to first “acquire a greater understanding of the present” custodial framework.

In February, the SEC voted 4-1 to develop the scope of the present advisor custody rule past consumer funds and securities to incorporate any consumer property of which an advisor has custody, together with cryptocurrencies.

On Aug. 23, the SEC reopened the remark interval on the proposed new safeguarding rule that might redesignate and amend the present custody rule below the Funding Advisers Act.

The preliminary remark interval ended on Might 8. The rule was printed on Aug. 30 within the Federal Register for a 60-day remark interval.

“The place the Fee can establish shortcomings which have failed to guard traders from loss or misappropriation of conventional property, it ought to suggest modifications, primarily based on a cautious analysis of the problems recognized by commenters, that focus on any gaps within the present custodial framework whereas preserving that framework’s many strengths,” the commerce teams wrote.

They continued: “If these modifications signify a fabric change from the method within the Proposal, the Fee ought to withdraw and re-propose the Proposal.”

Finalizing a brand new rule “of which vital parts have been materially modified from the model as proposed would deny the general public the chance to supply invaluable suggestions on these modifications and deprive the Fee of the advantages of any such suggestions, penalties that might undermine the integrity and high quality of our securities markets and the rules that govern them,” the teams stated.

The proposal, the teams reiterated to Gensler, contains “4 elementary modifications to right now’s well-established and demonstrably efficient custody framework with out a clear coverage rationale,” together with creating “a very broad definition of ‘custody’ that features many advisor practices which are already closely regulated.”