Oct. 24, 2023
Securities and Exchange Commission 100 f Street NE Washington, DC 20549 Re: Safeguarding Advisory Client Assets - Release No. IA-xxxx; File No. S7-xx-xx Dear Sir/Madam, I am writing this public comment to express my concerns regarding the proposed rule on the safeguarding of advisory client assets. While I appreciate the goal of enhancing investor protection and addressing gaps in the custody rule, I believe the Securities and Exchange Commission (SEC) may be overreaching its regulatory authority with certain provisions of this proposal. One specific issue I would like to draw attention to is the potential privacy and safety risks associated with allowing numerous third parties access to sensitive financial data, including social security numbers. The proposed rule requires investment advisers to provide custodial account numbers and custodian information to clients when opening an account with a qualified custodian. While this information is necessary for transparency and regulatory oversight, it also exposes clients to potential privacy breaches and identity theft. As I consider the importance of safeguarding client assets, I am equally concerned about the need to protect the confidentiality and privacy of personal information. With the rise in cybercrime and data breaches, it is crucial to strike a balance between regulatory oversight and safeguarding individual privacy. Therefore, it is imperative that the SEC carefully considers the potential risks associated with the collection and disclosure of personal financial data. In addition, this proposal raises concerns about the regulatory boundaries of the SEC's authority. While it is important to address investor protection, there is a risk of encroachment on areas that should be regulated by other agencies. It is crucial for the SEC to collaborate with other regulators to ensure a coordinated and comprehensive approach to investor safety. Furthermore, I believe that the economic analysis of the proposed rule needs to adequately address the potential costs and burdens imposed on investment advisers. The SEC's qualitative and quantified assessments of economic effects should thoroughly consider the magnitude of compliance costs for investment advisers, particularly small entities. Care should be taken to strike a balance between enhancing investor protection and minimizing undue financial burden on advisers. In conclusion, as a concerned investor, I want to emphasize the need for the SEC to carefully evaluate the potential privacy risks associated with the proposed rule. Additionally, I encourage the commission to ensure that the proposed rule remains within the confines of its regulatory authority, collaborating with other agencies where necessary to avoid unnecessary overlap or duplication. Lastly, I urge the SEC to conduct a comprehensive economic analysis considering the costs and burdens imposed on investment advisers, particularly smaller entities. Thank you for considering my concerns. I hope that my comments will be taken into account and contribute to the development of a balanced and effective rule that enhances investor protection while safeguarding individual privacy. Sincerely, Rob Date: Robert Pawlus