Oct. 28, 2023
Chris Carrie 123 Main Street Anytown, USA 12345 Date : October 28th 2023 Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Subject: Public Comment on "Safeguarding Advisory Client Assets" Proposal Dear Securities and Exchange Commission, I am writing to submit a public comment in response to the proposed rule on "Safeguarding Advisory Client Assets." While I acknowledge the importance of enhancing investor protections and addressing gaps in the custody rule, I have serious concerns about the potential overreach of regulatory authority by the SEC in certain areas and the impact it may have on the burgeoning field of digital assets, particularly cryptocurrency. First, let me address the potential overreach of regulatory authority. The SEC's proposed rule expands the coverage to include a broader range of investments held in a client's account. While I appreciate the objective of safeguarding client assets, it is essential to ensure that the regulatory jurisdiction of the SEC does not encroach upon areas that should be regulated by other agencies. It is crucial to maintain a balanced and proportionate approach to regulation, where each agency upholds its mandated responsibilities without infringing on the jurisdiction of others. Furthermore, I would like to bring your attention to the challenges surrounding digital assets like cryptocurrency. Digital assets, built on blockchain technology, are transforming the financial landscape. However, regulatory uncertainties surrounding this emerging field pose considerable challenges. The proposed rule's application to crypto assets must be approached with caution and thoughtful consideration of the unique characteristics of this digital ecosystem. Cryptocurrencies operate on decentralized networks, offering specific security protocols and diverse custody arrangements. To effectively address the intricate nature of securing such assets, it is imperative to engage in meaningful dialogue and collaboration with stakeholders, including industry experts and regulating bodies like the Commodity Futures Trading Commission, to ensure an appropriate regulatory framework for the custody of digital assets. Beyond the potential overreach concerns, I would like to stress the need for flexibility and reasonable alternatives within the proposed rule. While investor protections are paramount, it is crucial to strike a balance that promotes innovation, efficiency, competition, and capital formation. Rigidity in the regulatory framework could stifle innovation, limiting the potential benefits that investment advisers, client-centric startups, and innovative financial technologies can bring to our economy. Moreover, I urge the Commission to carefully consider reasonable alternatives to the proposed rule. One-size-fits-all approaches may not be suitable for all investment advisers, especially those operating on a smaller scale. Customized compliance requirements that align with the size and resources of each adviser could ensure that investor protection is achieved without disproportionately burdening small entities. In conclusion, while I appreciate the SEC's intent to enhance investor protections and address the safeguarding of client assets, I urge the Commission to be mindful of potential overreach concerns and the unique challenges posed by digital assets. A measured and balanced regulatory approach, considering reasonable alternatives and collaborating with other relevant regulatory bodies, will foster innovation, ensure robust investor protections, and contribute to the evolution of our financial markets. Thank you for considering my comments. I appreciate the opportunity to contribute to this important public discussion. Please feel free to contact me with any questions or for further clarification. Sincerely, Chris Carrie Sent from my Galaxy