Oct. 28, 2023
Dear Securities and Exchange Commission, I, A Concerned U.S. Citizen, am writing to express my concerns regarding the proposed rule on "Safeguarding Advisory Client Assets" that you have put forward. While I understand the aim of enhancing investor protections and addressing gaps in the custody rule, I believe there are several issues with the proposal that need to be addressed. Specifically, I am concerned about the lack of clarity on reporting requirements for digital assets. Digital assets, such as cryptocurrencies, are rapidly growing in popularity and are becoming an integral part of the financial landscape. However, the regulatory framework surrounding these assets is still in its early stages, which creates uncertainties and challenges for market participants. In light of this, it is crucial for the SEC to provide clear guidance on reporting requirements for digital assets within the proposed rule. Without clear reporting requirements, investment advisers may struggle to properly document and report their holdings in digital assets. This lack of clarity not only hinders compliance efforts but also undermines investor protection. Investors should have the confidence that their advisers are accurately reporting their holdings, including any digital assets, as it directly impacts their financial well-being. Furthermore, the absence of clarity on reporting requirements for digital assets could lead to regulatory arbitrage and uneven market practices. Different interpretations and approaches by industry participants may result in fragmented reporting standards, creating confusion and increased market risks. It is essential for the SEC to proactively address these issues and provide clear and consistent guidance for reporting digital assets under the proposed rule. To ensure investor protection and market integrity, the SEC should consider establishing reporting frameworks that are tailored to the unique characteristics of digital assets. This could include requirements for accurate valuation methodologies, transparency in reporting, and adherence to industry best practices. By doing so, the SEC can provide certainty to market participants and foster the growth of responsible and accountable digital asset investments. In conclusion, I urge the Securities and Exchange Commission to address the lack of clarity on reporting requirements for digital assets within the proposed rule. Clear guidance will not only enhance investor protection but also facilitate the development of a robust and transparent digital asset market. I believe it is of utmost importance for the SEC to seize this opportunity to establish a comprehensive regulatory framework that supports innovation while ensuring the integrity of the financial system. Thank you for considering my concerns. I appreciate the opportunity to provide feedback on this important matter. Sincerely, A Concerned U.S. Citizen