Oct. 25, 2023
Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090 Re: Safeguarding Advisory Client Assets Proposal Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on the Safeguarding Advisory Client Assets. While I appreciate the Commission's efforts to enhance investor protections and address gaps in the custody rule, I have reservations regarding the potential overreach of regulatory authority and the poorly defined terms used in the proposal. Firstly, I am concerned that the SEC's proposed rule may exceed its regulatory authority, encroaching on areas that should be regulated by other agencies. It is crucial to ensure that regulatory frameworks are well-defined and appropriate for the specific functions and industries they intend to oversee. If the proposed rule extends beyond the SEC's jurisdiction, it risks creating confusion and inconsistency within the regulatory landscape. Furthermore, the use of poorly defined terms in the proposed regulations is problematic. For instance, terms such as "platform", "software" and "ledger" are susceptible to broad interpretations, potentially leading to varied compliance practices across the industry. Moreover, the definition of terms like "wallet" and "validator" deviates from their technical meaning, which could significantly impact the interpretation and implementation of the rule. It is essential to have clear and unambiguous definitions to ensure consistent adherence and minimize confusion among market participants. The lack of clarity around these terms might impede effective compliance and hinder innovation within the industry. It is crucial for regulators to strike a balance between investor protection and fostering technological advancements. In light of the above concerns, I urge the Commission to carefully review the proposed rule to ensure it appropriately aligns with the SEC's regulatory authority and establishes clear definitions for the terms used within the regulations. Thank you for considering my comment on this important matter. I trust that you will give due consideration to the concerns raised. Sincerely.