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.