Oct. 30, 2023
James Holloway Securities and Exchange Commission 100 F Street, NE Washington, D.C. 20549 To Whom It May Concern, I am writing to provide my comments on the Securities and Exchange Commission's (SEC) proposed rule regarding the safeguarding of advisory client assets. As an investor and advocate for financial inclusivity and innovation, I have concerns about the potential negative impact these proposed rules may have on investor access to digital assets, particularly in emerging asset classes. Firstly, I would like to address the potential impact on small businesses. While the proposed reporting requirements aim to enhance investor protections, they may also cause significant burdens on small businesses and startups that would not otherwise be required to track personally identifiable information (PII). Implementing these tracking protocols imposes additional costs on these businesses, potentially stifling innovation and limiting their ability to compete in the market. Moreover, the inclusion of digital assets within the proposed rules raises concerns about their classification under the current regulatory framework. Digital assets, such as cryptocurrencies, have gained significant popularity among investors seeking diversified portfolios and opportunities for growth. However, the SEC's involvement in regulating these assets may inadvertently restrict investor access and impede their ability to participate in this rapidly evolving asset class. It is essential for the SEC to carefully consider the potential negative consequences of these regulations on investor access to digital assets. Furthermore, I am concerned about the broader impact on investor value when the SEC gets involved in the regulation of cryptocurrencies. The SEC's heavy-handed approach has the potential to hamper the dynamic nature of these markets and may deter investors from pursuing these innovative investment opportunities. By imposing additional regulatory requirements, there is the risk of discouraging investment and hindering the growth of this innovative sector. While I recognize the importance of investor protections and the need to address potential risks, it is equally crucial to strike the right balance between regulatory oversight and fostering an environment that encourages innovation and economic growth. Any attempt to regulate emerging technology should prioritize a flexible, principles-based approach that adapts to the rapid pace of innovation. In conclusion, I urge the SEC to carefully consider the potential negative effects of the proposed rules on small businesses, investor access to digital assets, and the overall growth of this burgeoning industry. The delicate balance between investor protection and innovation must be maintained to ensure a dynamic and inclusive financial landscape. Thank you for considering my comments on this important matter. I appreciate the SEC's dedication to safeguarding investor interests, and I trust that my concerns will be given due consideration. Should you require any further information or clarification, please do not hesitate to contact me. Sincerely, James Holloway