Oct. 23, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets." As an individual investor and advocate for transparency and investor protection, I have closely examined the provisions outlined in the proposal and believe there are several areas that require further clarification and consideration. One key concern I have pertains to the lack of clarity on custody requirements for digital assets. In today's rapidly evolving financial landscape, digital assets, especially cryptocurrencies built on blockchain technology, have emerged as a transformative force. However, the proposal falls short in providing clear guidelines on how investment advisers should safeguard these assets. This lack of clarity creates significant uncertainty for market participants and inhibits the development and adoption of digital assets as a legitimate asset class. Given the unique nature of digital assets, it is imperative that the SEC provides precise definitions and guidance on custody requirements. The absence of specific provisions for digital assets creates a regulatory gap that may leave investors vulnerable to mismanagement or theft. Enhancing investor protections should be a paramount objective of this rule, and digital assets should not be overlooked or treated as an afterthought. Furthermore, the proposal should incorporate the lessons learned from recent high-profile cases involving the mismanagement of digital assets. These cases highlight the need for robust safeguards and best practices tailored to the unique characteristics of digital assets. By providing clearer guidance, the SEC can foster an environment in which investment advisers can confidently operate in the digital asset space while ensuring the utmost protection for their clients. In addition to the concerns surrounding digital assets, I want to underscore the importance of striking the right balance between investor protection and compliance costs. While it is crucial to enhance safeguards for advisory client assets, it should be done in a manner that does not place an undue burden on investment advisers, particularly smaller firms. The proposal's estimated compliance costs must be carefully weighed against the benefits to ensure that the rule does not inadvertently create barriers to entry or hinder competition. Moreover, I believe the proposal should be mindful of the potential impact on innovation and capital formation. As the world rapidly embraces digital assets and other technological advancements, it is essential for regulatory frameworks to keep pace with these developments. By providing clear rules and guidelines, the SEC can help foster an environment that encourages innovation while simultaneously protecting investors and maintaining market integrity. In conclusion, I commend the SEC for its efforts to enhance the safeguarding of advisory client assets. However, I encourage the Commission to address the aforementioned concerns regarding custody requirements for digital assets and balance the need for investor protection with the potential burden on investment advisers. By doing so, the SEC can contribute to the development of a robust and vibrant financial ecosystem that embraces the benefits of digital assets while safeguarding the interests of investors. Thank you for considering my comments. I remain committed to supporting regulatory initiatives that prioritize transparency, protection, and innovation in the financial industry. Sincerely, RJ Salisbury Sent from my iPhone