February 12, 2022 Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 RE: Public Comment - Safeguarding Advisory Client Assets (Release No. IA-5878) To Whom It May Concern, I am writing to express my concerns regarding the proposed rule on Safeguarding Advisory Client Assets. While I understand the intention to enhance investor protections and address gaps in the custody rule, there are certain areas of the proposal that require further deliberation to safeguard privacy and ensure the safety of sensitive financial data. Lack of Clarity on the Definition of Digital Assets: One significant concern arises from the lack of clear guidance on the definition of digital assets within the proposed rule. In an era where financial transactions are becoming increasingly digitized, it is imperative to provide clarity on what constitutes a digital asset to prevent any confusion or potential misinterpretation. The regulatory framework must evolve to accommodate this emerging asset class, while still ensuring robust investor protection. Furthermore, the proposal should outline specific safeguards for the custody and protection of digital assets. Given the unique nature of digital assets, it is essential to establish clear protocols to prevent unauthorized access, cyber threats, and potential hacks. Privacy and Safety of Sensitive Financial Data: While the proposed rule aims to enhance investor protection, it is crucial to also consider the privacy and safety implications associated with granting numerous third parties access to sensitive financial data and social security numbers. Mitigating risks related to data breaches and identity theft should be of paramount concern. Striking the right balance between investor protection and individual privacy is pivotal in our digital age. To address these concerns, it is imperative to establish stringent privacy and security protocols within the proposed rule. Robust encryption methods, regular security assessments, and strict data access control measures should be mandatory requirements for investment advisers who will be handling sensitive client information. Robust Oversight and Enforcement: The proposed rule rightfully emphasizes the importance of overseership in safeguarding client assets. However, to ensure effective enforcement, it is imperative to ensure that adequate resources and oversight mechanisms are in place. This includes providing ample training to investment advisers, conducting regular audits, and appropriate penalties for non-compliance. In addition to rule amendments, the Securities and Exchange Commission (SEC) should consider implementing measures to verify compliance with the proposed rule, such as mandated audit procedures, third-party assessments, or even a centralized platform for transparent reporting. This will enhance the overall reliability and integrity of the regulatory framework. In conclusion, I urge the Securities and Exchange Commission to carefully consider the concerns raised regarding the lack of clarity on the definition of digital assets, as well as the privacy and safety risks associated with the proposed rule. Moreover, to ensure the optimal implementation of the safeguarding advisory client assets, the SEC should prioritize robust oversight mechanisms and enforcement procedures. Thank you for considering these important factors. I trust that my comments will contribute to the development of a comprehensive regulatory framework that protects both investors and their privacy. Sincerely, Anonymous