Oct. 23, 2023
Gary Ryan [REDACTED] 10/23/2023 Securities and Exchange Commission 100 F Street NE Washington, DC 20549 Re: Safeguarding Advisory Client Assets (Release No. IA-XXXX; File No. S7-XXXXX) Dear Sir/Madam, I am writing to provide my comment on the proposed rule, Safeguarding Advisory Client Assets, as released by the Securities and Exchange Commission (SEC). As an experienced investor who cares deeply about investor protections and the functioning of financial markets, I have closely reviewed the proposed rule and its potential implications. While I appreciate the SEC's intention to enhance investor safeguards, I have concerns regarding certain aspects of the proposal, which I believe require further consideration and revision. First and foremost, I urge the SEC to provide greater clarity on the definition of digital assets. The evolving nature of this market demands a clear and concise framework, which currently appears absent from the proposal. The lack of precise guidance on what constitutes a digital asset may lead to confusion and misinterpretation. To ensure investor protection and promote market integrity, it is crucial that the SEC offers clear guidelines for identifying and regulating digital assets. Furthermore, I have reservations about the reporting requirements outlined in the proposed regulations. The rule introduces obligations for multiple participants in decentralized finance (DeFi), potentially leading to inconsistent and duplicative reporting for the same transaction. This complexity will likely result in significant burdens for market participants and hinder the efficient functioning of DeFi platforms. To avoid such adverse consequences, I urge the SEC to reconsider and revise the reporting requirements to streamline the reporting process and harmonize it with existing frameworks where appropriate. Additionally, I would like to express my concerns regarding the potential impact of these proposed regulations on the competitiveness of the U.S. market compared to its global counterparts. With various regulatory frameworks emerging across jurisdictions, there is a risk of creating disjointed and inconsistent regulatory environments. This fragmentation could put U.S. markets at a disadvantage, discourage innovation, and limit the growth potential of the industry. I would like to request the SEC to conduct a thorough analysis of the potential impact and consider ways to promote consistency and harmonization across jurisdictions to ensure a level playing field and competitive landscape for all market participants. In conclusion, the proposed rule, Safeguarding Advisory Client Assets, raises critical concerns that demand careful consideration and revision. The lack of clarity in defining digital assets, complexities surrounding reporting requirements for DeFi, and potential negative impact on the competitiveness of the U.S. market warrant further analysis and additional revisions. I applaud the SEC's efforts in safeguarding investor interests and enhancing transparency, but I believe a more nuanced approach is required to address the challenges posed by these rapidly evolving markets. Thank you for considering my comments. I appreciate the opportunity to contribute to this public discourse and strongly encourage the SEC to carefully evaluate the concerns raised by stakeholders like myself. If further clarification or additional input is needed, please do not hesitate to contact me. Sincerely, Gary Ryan