Oct. 29, 2023
Securities and Exchange Commission 100 F Street NE Washington, DC 20549 Subject: Safeguarding Advisory Client Assets - Public Comment Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets" (Release No. IA-3311) by the agency. While I acknowledge the aim of the rule to enhance investor protections and address gaps in the custody rule, I have certain concerns regarding its practicality and potential negative impacts on small businesses and individuals. Firstly, I would like to express my concern regarding the inadequate consideration given to the unique properties of cryptocurrency in the proposed rule. It is crucial for the Securities and Exchange Commission (SEC) to fully understand and acknowledge the decentralized nature and technological complexities of cryptocurrency before imposing impractical regulatory requirements. Failing to do so may undermine the industry's potential for growth and innovation, and hinder the ability of small businesses to flourish in this emerging field. Furthermore, I am deeply concerned about the potential impact on small businesses and start-ups resulting from the reporting requirements outlined in the proposed rule. These requirements would necessitate the tracking of personal identifiable information, imposing substantial costs on businesses that may not have otherwise been required to implement such tracking measures. This additional burden could put these projects at a disadvantage and stifle innovation in the financial technology sector. Small businesses are often important incubators of innovation and imposing excessive regulatory burdens could potentially hinder their ability to thrive and contribute to economic growth. In addition to the impact on small businesses, I worry about the potential financial harm that individuals may face as a result of this proposed regulation. The increased costs incurred by investment advisers to meet the new reporting and compliance requirements could ultimately be passed on to clients, leading to higher fees and expenses. This burdensome situation may discourage individuals from seeking financial advice and harm their personal financial well-being. It is imperative for the Securities and Exchange Commission to carefully consider the potential consequences, unintended burdens, and disproportionate costs that this proposed rule may impose on small businesses and individuals. Any regulation introduced should promote innovation, competition, and economic growth, rather than hinder it. In conclusion, I strongly urge the SEC to revise and reconsider certain aspects of the proposed rule "Safeguarding Advisory Client Assets." It is critical to take into account the unique nature of cryptocurrency, the potential negative impact on small businesses, and the potential financial harm to individuals. Striking a balance and addressing these concerns will ensure proper investor protection while facilitating innovation and entrepreneurial spirit within the financial industry. Thank you for considering my comments. I appreciate the opportunity to contribute to this important dialogue and look forward to a solution that prioritizes both investor protection and economic growth. Sincerely, Concerned Citizen