Oct. 23, 2023
Dear Sir/Madam, I am writing to submit my public comment on the proposed rule "Safeguarding Advisory Client Assets" by the Securities and Exchange Commission (SEC). While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns and reservations regarding the proposed rule. Firstly, I believe that there is a lack of industry expertise in drafting the proposal. The SEC does not have sufficient expertise in digital assets and cryptocurrency, which has resulted in a lack of understanding of the industry's unique characteristics. This lack of expertise is evident in the proposed rule's treatment of crypto assets and challenges in demonstrating exclusive control over these assets. The SEC needs to collaborate with industry experts to ensure that the proposal adequately addresses the complexities and nuances of the digital asset landscape. Furthermore, I have significant concerns regarding privacy and the safety of sensitive financial data and personal information. The proposal requires investment advisers to provide extensive information about custodians and accountants involved in safeguarding client assets, including social security numbers and account details. Such a wide dissemination of this information poses a significant risk to the privacy and security of individuals. The SEC should consider altering the requirements to strike a better balance between investor protection and privacy rights. In conclusion, while I appreciate the SEC's intention to improve investor protections, I urge the commission to address the lack of industry expertise in the proposal and carefully consider the privacy concerns associated with the extensive disclosure requirements. Collaborating with industry experts and striking a balance between investor protection and privacy rights will lead to a more effective and balanced regulatory framework. Thank you for considering my comments. I hope they will contribute to a thoughtful and robust conversation on this important matter. Sincerely, Ivan Johnson