Dear Securities and Exchange Commission, I am writing to express my deep concerns regarding the proposed rule on Safeguarding Advisory Client Assets. While I appreciate the SEC's intentions to enhance investor protections and address gaps in the current custody rule, I firmly believe that the proposal falls short in several critical areas that require immediate attention. First and foremost, I want to emphasize the urgent need for the SEC to provide clear guidance and regulations concerning smart contracts within the framework of the proposed rule. Smart contracts, with their unique characteristics of self-execution and immutability, pose significant challenges in terms of regulatory oversight. Failing to address this emerging technology adequately not only creates uncertainty but also exposes investors to potential exploitation, undermining the very objectives the SEC seeks to accomplish. It is imperative for the SEC to prioritize understanding and regulating smart contracts within the proposed rule to maintain market integrity and investor trust. Another grave concern I have is the potential invasion of privacy resulting from the proposed rule's requirements for extensive disclosure of sensitive financial data and personal information. In an era plagued by constant threats of cyberattacks and data breaches, it is inconceivable to subject investors to the risks associated with sharing such valuable and vulnerable data with multiple third parties. The SEC must assume the responsibility of safeguarding the privacy and protecting the personal information of individuals by implementing robust measures that counteract the escalating dangers posed by cyber threats. Without tangible assurances, the proposed rule jeopardizes the very fabric of investor trust. Moreover, while I acknowledge the imperative to protect client assets as a fundamental principle of investor protection, I am concerned about the potential adverse impact of the proposed rule on small investment advisers. The compliance costs and regulatory burden associated with the rule could disproportionately affect smaller entities, stifling innovation and limiting market participation. It is crucial for the SEC to conduct a thorough assessment of the economic effects and carefully analyze reasonable alternatives that strike a balance between ensuring investor safeguards and preserving the viability of small advisory firms. Ignoring such considerations risks damaging market competition and stifling entrepreneurship within the industry. Furthermore, I commend the SEC for soliciting public input and contemplating alternative suggestions. However, I urge the commission to approach the final rule with maximum transparency and inclusivity by actively engaging with stakeholders knowledgeable in the fields of smart contracts, privacy, and small business operation. In doing so, the SEC can leverage the diverse expertise and perspectives available to create a more comprehensive and effective rule that truly elevates investor protections and promotes sustainable market growth. In conclusion, the proposed rule on Safeguarding Advisory Client Assets requires immediate revision and elaboration to address the unique challenges presented by smart contracts, safeguard investor privacy, and alleviate the disproportionate burden on small investment advisers. By strengthening these critical areas and fostering collaboration with industry experts, the SEC can achieve its desired objectives of enhancing investor safeguards while ensuring the stability and competitiveness of the investment advisory landscape. Thank you for your attention to these pressing concerns. Sincerely, John Anderson