Oct. 29, 2023
From: Mr RAY 29th October, 2023 To: Securities and Exchange Commission 100 F Street NE Washington, DC 20549-0213 Subject: Public Comment - Safeguarding Advisory Client Assets Proposal Dear Securities and Exchange Commission, I am writing to provide my concerns and comments regarding the proposed rule, "Safeguarding Advisory Client Assets," as outlined in Release No. IA-5847; File No. S7-06-21. As an interested party and stakeholder, I believe it is crucial to express the potential adverse impacts of the proposed rule, particularly on small businesses and startups within the digital asset industry. Burden on Small Businesses and Startups One of the major concerns with the proposed rule is its disproportionate burden on small businesses and startups. The reporting requirements imposed by the rule would necessitate the tracking of personally identifiable information, a practice which many small businesses and startups in the digital asset industry may not have been previously required to undertake. Implementing such tracking protocols entails significant expenses for these entities, hindering their growth prospects and stifling innovation. Impact on Small Businesses The proposed rule exacerbates the financial strain on small businesses by imposing substantial compliance costs. This additional burden threatens the sustainability and viability of many small businesses and start-ups within the digital asset industry. The costs associated with implementing and maintaining the requisite tracking protocols would place these projects at a severe disadvantage, restricting their ability to compete on a level playing field with larger entities. Consequently, this rule has potential ramifications not only for small business growth but also for the future progress and innovation within the digital asset space. Stifling Innovation The digital asset industry thrives on innovation and technological advancement. However, the proposed rule's burdensome reporting requirements are likely to slow down the pace of innovation and introduce confusion, particularly for small businesses and startups. The costs associated with compliance take away valuable resources that could otherwise be allocated to research and development, further stifling the groundbreaking work of these smaller entities. Encouraging innovation should be a significant priority for regulatory bodies such as the SEC, as it contributes directly to the advancement of the industry and benefits both investors and consumers. Conclusion While the intent of the proposed rule to safeguard client assets and enhance investor protection is commendable, it is vital to consider the potential unintended consequences, especially on small businesses and startups within the digital asset industry. The burden imposed by the proposed rule, specifically the reporting requirements and associated compliance costs, could hinder the growth and innovation of these entities. Striking the right balance between investor protection and fostering an environment that promotes creativity, innovation, and economic growth is crucial. I urge the Securities and Exchange Commission to critically evaluate the potential negative effects on small businesses and startups before finalizing the rule. Thank you for your attention to this important matter. I appreciate the opportunity to contribute to the regulatory process and request that my concerns be duly considered. Should you require any further clarification or information, please do not hesitate to contact me. Sincerely, Mr RAY Advocating for a more innovative, inclusive & fair digital industry 3.0 Sent with Proton Mail secure email.