Dear Sir/Madam, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I would like to raise some concerns and offer suggestions that I believe would result in a more balanced and effective regulatory framework. Firstly, I would like to discuss the scope of the proposed rule. While it is understandable that the SEC aims to expand coverage to include a broader range of investments held in a client's account, it is crucial to ensure that the definition of assets and the inclusion of discretionary authority in custody are clearly defined. Ambiguity in such definitions may lead to inconsistent interpretation and implementation, potentially introducing unintended consequences. To address this, I suggest that the SEC provides additional guidance and clarity on these key aspects of the rule. Additionally, I am concerned about the provisions related to crypto assets. It is essential to acknowledge the unique challenges and complexities associated with safeguarding these assets. However, the proposed rule should avoid stifling innovation and growth in this emerging area. Instead of prescribing rigid requirements, the SEC should work with industry participants and relevant stakeholders to develop scalable and adaptable safeguards that align with the rapidly evolving landscape of crypto assets. Furthermore, the rule should address the issue of certain assets that are unable to be maintained with a qualified custodian. While I agree that enhanced recordkeeping, separation of duties, and regular reviews are necessary to protect these assets, it is crucial to establish clear guidelines to achieve this effectively. The proposed rule should provide specific requirements and guidance to ensure that investment advisers are equipped with the necessary tools and knowledge to safeguard these assets appropriately. In regards to the segregation of client assets, I appreciate the SEC's emphasis on protecting client assets through clear and enforceable rules. However, the rule should also consider the potential challenges that investment advisers may face in implementing strict segregation requirements. The SEC should provide flexibility and allow for reasonable exceptions, as long as they do not compromise the overarching goal of investor protection. I also have concerns about the amendments to the surprise examination requirement. While I understand the importance of independent oversight, the proposed changes may introduce additional burdens for investment advisers. To strike a balance between safeguarding client assets and minimizing compliance costs, the SEC should explore alternative approaches that achieve the same level of oversight without unduly burdening investment advisers. Moreover, the proposed amendments to the investment adviser recordkeeping rule raise concerns. While maintaining comprehensive records is crucial for effective oversight and investor protection, it is important to ensure that the recordkeeping requirements are reasonable and aligned with industry practices. Excessive recordkeeping obligations can be burdensome, especially for smaller investment advisers with limited resources. The SEC should consider industry best practices and proportionality when defining the recordkeeping obligations. Regarding changes to Form ADV, I appreciate the SEC's efforts to enhance transparency and regulatory oversight by requiring reporting on custody of client assets and information about custodians and accountants. However, it is important to balance the need for information with the administrative burden imposed on investment advisers. The SEC should streamline the reporting requirements and leverage technology solutions to minimize the compliance costs associated with these changes. I would also like to comment on the economic analysis conducted by the SEC. While I appreciate the efforts to evaluate the costs and benefits of the proposed rule, there should be greater consideration given to the potential economic effects on investment advisers of varying sizes and business models. The effective implementation of the rule requires an understanding of the unique challenges faced by different types of advisers. I urge the SEC to incorporate a more nuanced analysis that takes into account the diverse practices and operational realities of investment advisers when estimating the economic effects of the rule. Furthermore, I believe it is essential to consider the potential impact of the proposed rule on small advisers. It is important to strike a balance between investor protections and the compliance requirements imposed on small entities. The SEC should explore ways to minimize the administrative burden for small advisers while still achieving the desired investor protections. Providing further clarification and simplification of the rule would be beneficial in this regard. Lastly, I would like to urge the SEC to consider the impact that this proposed rule may have on the media industry and freedom of speech. The rule's potential impact on journalists and news organizations critical to democratic processes should not be overlooked. It is crucial that the SEC takes steps to ensure that the proposed rule promotes a robust and independent press that serves the public interest and holds power accountable. In conclusion, I appreciate the SEC's dedication to enhancing investor protections through the proposed rule. My comments above aim to provide a holistic perspective and suggest areas of improvement that would result in a balanced regulatory framework that furthers the interests of both investors and investment advisers. I commend the SEC for offering an opportunity for public comment, and I hope that my input will contribute to the development of a more effective rule. Thank you for considering my comments. Sincerely, Brad Federer