Oct. 24, 2023
Public Comment on "Safeguarding Advisory Client Assets" Proposal Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on Safeguarding Advisory Client Assets. While the aim of enhancing investor protections and addressing gaps in the custody rule is commendable, there are certain aspects of the rule that may exceed the regulatory authority of the Securities and Exchange Commission (SEC) and encroach upon areas that should be regulated by other agencies. One area of concern in this regard is the treatment of digital assets or cryptocurrencies. Digital assets, built on blockchain technology, have the potential to revolutionize the financial industry and provide new investment opportunities. However, the regulatory uncertainties surrounding these assets pose significant challenges that should be addressed by agencies specifically tasked with overseeing this rapidly evolving sector. Digital assets operate in a complex and global landscape, requiring careful consideration of various legal, economic, and technological factors. The SEC's proposed rule, as it currently stands, may inadvertently stifle innovation and hinder the growth of this promising industry. It is crucial that the SEC collaborate with other regulatory bodies, such as the Commodity Futures Trading Commission (CFTC) and international counterparts, to establish a comprehensive framework that ensures investor protection without impeding technological advancements. Furthermore, it is essential to consider the potential impact of the proposed rule on human rights. As the digital asset market expands, it has the potential to empower individuals worldwide, particularly those living under repressive regimes or with limited access to traditional financial systems. Recognizing and respecting the rights of individuals to freely transact and preserve their privacy in the digital realm is crucial. Any regulatory measures in this space must strike a balance between protecting investors and upholding fundamental human rights. In concluding my concerns, I urge the SEC to proceed with caution and ensure that the proposed rule does not overreach its jurisdiction. Collaboration with other regulatory bodies and international entities is vital to fostering innovation, addressing regulatory challenges, and achieving comprehensive investor protection in the digital asset space. Thank you for considering my comments. I look forward to the SEC's response and further dialogue on this important matter. Sincerely, Marcelo