Subject: S7-04-23: Webform Comments from Tam Trinh
From: Tam Trinh
Affiliation:

Oct. 28, 2023

Dear Securities and Exchange Commission,

I am writing to express my strong concerns regarding the proposed rule
on Safeguarding Advisory Client Assets. While I appreciate the
SEC's objective of enhancing investor protections and addressing
gaps in the custody rule, I believe that certain aspects of the
proposed rule may have unintended negative consequences on the
development and adoption of open finance platforms. 

As a proud citizen of this great nation, I firmly believe in the
importance of fostering innovation and technological advancements that
can strengthen our economy and provide greater financial opportunities
for all Americans. Open finance, with its potential to revolutionize
traditional financial systems through the use of decentralized
networks and blockchain technology, embodies the spirit of innovation
and promises a more democratized and inclusive financial landscape. It
is essential that any regulatory measures introduced support and
encourage the growth of open finance platforms, rather than impede
their progress.

One particular concern is the proposed requirement for investment
advisers to provide detailed client account information, including
custodian information and custodial account numbers. While the
intention may be to enhance transparency and investor protection, we
must also consider the potential privacy and security risks associated
with sharing sensitive financial data. In a world where cyber threats
are a constant reality, it is imperative that we find a balanced
approach that safeguards investors without exposing them to
unnecessary vulnerabilities. I urge the SEC to carefully evaluate the
privacy implications of these requirements and seek alternative
methods to achieve the desired investor protections, taking into
consideration the overarching goal of promoting innovation and
economic growth.

Furthermore, the proposed rule's stringent requirements on
custody, reporting, and record-keeping may inadvertently hinder the
progress of open finance platforms. These platforms, fueled by
decentralized networks and cutting-edge technologies, have the
potential to transform traditional financial systems, making them more
efficient, secure, and accessible. However, applying the same rules
designed for traditional custodial arrangements to these innovative
platforms may stifle their growth and hinder the realization of their
full potential. To fully harness the benefits of open finance, it is
crucial that regulatory frameworks align with the unique operating
models of these platforms, ensuring that investor protections are
maintained while fostering an environment that encourages
technological advancement and economic prosperity.

In closing, I would like to commend the SEC for its dedication to
protecting investors and ensuring the stability and integrity of our
financial markets. As an engaged citizen, I believe it is my duty to
raise concerns about the potential unintended consequences of the
proposed rule on open finance platforms. I respectfully urge the SEC
to embrace the spirit of innovation and work closely with industry
stakeholders to modify the rule in a way that encourages the growth of
open finance while upholding investor protections.

Thank you for considering my comments. I am profoundly appreciative of
the opportunity to provide feedback on this important matter.