Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule titled "Safeguarding Advisory Client Assets." While I understand that the goal of this rule is to enhance investor protections and address gaps in the custody rule, I believe there are certain aspects of the proposal that require further consideration. One area of concern is the potential negative impact on the issuance and trading of tokenized commodities. With the rise of digital assets and blockchain technology, tokenized commodities have become an innovative way to facilitate investment and improve market efficiency. However, the proposed rules may hinder the development and adoption of tokenized commodities, limiting the benefits of digitization for the commodities market. It is important to strike a balance between investor protections and fostering innovation in the financial markets. Furthermore, I believe there is a need to address the lack of privacy associated with the proposed rule. While it is crucial to ensure the safety of client assets, it is equally important to safeguard the privacy of individuals involved in these transactions. The proposed rule should take into consideration the need for privacy protections, which are vital to maintaining the integrity of the financial system. In addition to these specific concerns, I would like to bring attention to a broader issue. The proposed rule, while well-intentioned, may have unintended consequences that impact market participants. It is crucial for the Securities and Exchange Commission to carefully evaluate the potential effects of these rules on market efficiency, competition, and capital formation. A thorough analysis of the economic impacts should be conducted to ensure that the benefits outweigh the costs. Furthermore, I urge the Securities and Exchange Commission to seek public input on reasonable alternatives to the proposed rule. As stakeholders with diverse perspectives and expertise, we can contribute valuable insights that may lead to more effective and balanced regulations. It is essential to consider a range of options to achieve the desired investor protections without unduly burdening market participants. Lastly, I would like to express my appreciation for the inclusion of an economic analysis in the proposal. This demonstrates a commitment to transparency and understanding the potential economic effects of the rule amendments. I encourage the Securities and Exchange Commission to continue seeking comments on the economic analysis, benefits, costs, efficiency, competition, and capital formation effects of the proposed rule. Our collective input can help refine and improve the regulations. Thank you for considering my concerns and for providing an opportunity to contribute to the public comment process. I look forward to the Securities and Exchange Commission's thoughtful evaluation of these issues and addressing them appropriately in the final rule.