Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets." I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule. However, I have strong concerns regarding the ongoing negative impacts on the competitiveness of US companies, investors, and the treatment of digital assets. First, I am concerned that the proposed rules may put US companies at a competitive disadvantage compared to their international counterparts. While safeguarding client assets is crucial, overly burdensome regulations can impede the ability of US investment advisers to compete globally. This could lead to capital flight and loss of market share for US companies, hindering their ability to support economic growth and job creation. Additionally, I would like to address the treatment of digital assets or cryptocurrencies. These assets, built on blockchain technology, are transforming the finance industry and. Regulatory uncertainties surrounding digital assets pose significant challenges for investment advisers and can deter them from offering these assets to their clients. It is important to strike a balance between investor protections and enabling the growth of this burgeoning sector. Founders in this new sector are effectively being issued speeding tickets without being told what the speed is. There needs to be clear rules that address shifts in technology and aren't based on 100 yr old market concepts. This mainly applies to DeFi in which consumers interact with computer code in order to protect themselves from unneeded middlemen, custody houses, unnecessary fees, and and risk from data breaches. This is repairing the very concept of privacy in this country. I urge the SEC to carefully consider the potential negative impact on the competitiveness of US companies and the treatment of digital assets in these proposed rules. It is crucial to create a regulatory framework that not only protects investors but also encourages innovation and ensures the US remains globally competitive. Thank you for considering my concerns. I encourage the SEC to address these issues in its final rule. Sincerely, Michael M.