Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to provide my comment on the proposed rule "Safeguarding Advisory Client Assets" (Rule No: IA-xxxx; File No: S7-31-xx). I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule. However, I have a few concerns regarding the lack of clarity on the definition of digital assets and the privacy implications associated with allowing third parties access to sensitive financial data. Firstly, I would like to address the lack of clarity on the definition of digital assets. The proposed rule does not provide clear guidance on what constitutes a digital asset, leading to confusion and potential misinterpretation. As the digital asset industry continues to evolve, it is imperative that the SEC provide explicit definitions to ensure clarity and alleviate any concerns surrounding compliance. Furthermore, I am deeply concerned about the privacy implications associated with allowing multiple third parties access to sensitive financial data and social security numbers. While safeguarding client assets is of utmost importance, the proposed rule may compromise the privacy and safety of individuals by exposing their personal information to various entities. It is crucial that the SEC ensures rigorous privacy measures are in place to protect investors from potential breaches or misuse of their financial information. Additionally, I urge the SEC to consider alternatives that strike a balance between investor protections and privacy concerns. It may be beneficial to explore technological solutions such as data encryption or permissioned access to mitigate the risks associated with privacy breaches. By implementing robust privacy safeguards, the SEC can instill trust and confidence in investors while maintaining the security of their personal information. In conclusion, I appreciate the SEC's efforts to enhance investor protections through the proposed rule "Safeguarding Advisory Client Assets." However, I believe it is essential to provide clarity on the definition of digital assets and prioritize privacy safeguards when it comes to accessing sensitive financial data. By addressing these concerns, the SEC can ensure the proposed rule effectively safeguards client assets without compromising the privacy and security of investors. Thank you for considering my comment. Sincerely, Richard Knight