Oct. 22, 2023
Public Comment Submission Securities and Exchange Commission 100 F Street NE Washington, DC 20549-7561 Subject: Safeguarding Advisory Client Assets - Proposed Rule Dear Sir/Madam, I appreciate the opportunity to provide my comments on the proposed rule "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). As an individual investor and concerned citizen, I would like to address two areas of concern regarding the lack of clarity on custody requirements for digital assets and the privacy and safety associated with sharing sensitive financial information with multiple third parties. Firstly, the proposal conspicuously lacks clear guidelines on custody requirements for digital assets, which is essential in today's rapidly evolving technological landscape. As the prevalence and prominence of digital assets continue to grow, it is essential that regulatory agencies provide clear and unambiguous rules to protect investor interests. While the proposal acknowledges the inclusion of crypto assets within the scope of the rule, it falls short on providing comprehensive guidance on custody requirements for these assets. Considering the unique characteristics of digital assets and the accompanying risks, it is imperative that the SEC provides clear guidance to market participants regarding the custody of these assets. Without a clear framework, there exists a significant risk of uncertainty and potential vulnerabilities within the digital asset market, which can be exploited by bad actors. Moreover, lack of clarity on custody requirements may deter potential market participants from engaging in this burgeoning industry, stifling innovation and economic growth. To ensure investor protection and promote market stability, the SEC should collaborate with industry experts and stakeholders to develop comprehensive custody guidelines specifically tailored to digital assets. By doing so, market participants will benefit from a regulatory framework that fosters innovation, provides clarity, and mitigates potential risks associated with these assets. Additionally, I have concerns about the privacy and safety implications of sharing sensitive financial data and my social security number with multiple third parties as required in the proposed rule. While safeguarding client assets is of paramount importance, the proposal does not adequately address the potential risks associated with sharing such information. In an increasingly interconnected world where data breaches and identity theft are significant threats, it is crucial that regulatory bodies strike an appropriate balance between investor protection and privacy rights. Requiring investors to disclose their sensitive financial information to multiple parties increases the chances of this data falling into the wrong hands, potentially resulting in financial losses and compromised privacy rights. To address this concern, the SEC should incorporate robust data protection measures into the proposed rule. This may include requiring investment advisers to implement stringent cybersecurity protocols, conducting regular audits of custodian firms to ensure data security, and imposing severe penalties for breaches of privacy or negligence in data protection. Moreover, promoting consumer education and awareness regarding data privacy and security practices within the advisory industry can also complement regulatory efforts. By equipping investors with the knowledge and tools to safeguard their sensitive information, the SEC would empower individuals to take an active role in their own digital security. In conclusion, I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule through the proposed rule "Safeguarding Advisory Client Assets." However, the lack of clarity on custody requirements for digital assets and potential privacy concerns associated with sharing sensitive financial information raise legitimate concerns. I urge the SEC to take these concerns seriously and work towards crafting a rule that provides clear guidelines for custody of digital assets while ensuring robust data protection measures. Thank you for considering my comments on this important matter. Sincerely, Amira Aljabasini