Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on Safeguarding Advisory Client Assets. While I appreciate the SEC's efforts to enhance investor protections, I believe there are several areas that require further consideration and revision. First and foremost, the proposed rule lacks adequate consideration of the unique properties of cryptocurrency. As the SEC seeks to regulate crypto assets, it is essential to recognize the decentralized nature and technological complexities that differentiate them from traditional assets. The proposed regulatory requirements fail to account for these nuances and impose impractical obligations on investment advisers. This could hinder the growth and innovation of this rapidly evolving industry. Furthermore, I am deeply concerned about the impact of the proposed rule on small businesses. The new reporting and tracking requirements will place a significant burden on small firms and startups that may not have the resources or infrastructure to comply with such complex regulations. These additional costs could put these ventures at a disadvantage and potentially stifle innovation in the advisory industry. It is crucial to consider the impact on small businesses and find a balance that allows for both investor protection and the growth of entrepreneurial enterprises. Additionally, the introduction of personal identifiable information (PII) tracking as a result of these reporting requirements raises privacy concerns. Many small businesses and startups may not have previously been required to track PII, and the implementation of such tracking will cause expense and potential vulnerabilities for sensitive client data. It is essential to evaluate the cost-effectiveness of collecting and storing this information while ensuring robust data security measures are in place. In regard to legal and procedural objections, it is imperative that the SEC address any challenges raised concerning constitutional principles or failure to follow proper notice-and-comment procedures. These objections should be thoroughly examined and resolved before the rule can take effect to ensure a fair and transparent regulatory process. In conclusion, I urge the SEC to reevaluate the proposed rule on Safeguarding Advisory Client Assets, taking into account the unique properties of cryptocurrency, the impact on small businesses, and potential privacy concerns. It is essential to strike the right balance between protecting investors and fostering innovation and growth within the advisory industry. I appreciate the opportunity to provide these comments and trust that you will consider them seriously. Sincerely, Dušan Brankovi?