Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets." While I recognize the importance of enhancing investor protection and addressing gaps in the custody rule, I have significant concerns regarding the lack of clarity in the definition of digital assets. One of the key issues I have identified is the lack of clear guidance on what constitutes a digital asset. The proposed rule utilizes undefined terms such as platform, software, and ledger. These terms are open to interpretation, and this ambiguity could lead to confusion and potential misinterpretation in the future. It is crucial that the SEC provides clear definitions and specific parameters to ensure consistent compliance and understanding throughout the industry. Furthermore, the proposal's definition of terms like wallet and validator also raises concerns. The technical meaning of these terms differs from the way they are defined in the proposal. This mismatch between the proposed definitions and their technical meaning can create confusion among investment advisers and hinder effective implementation of the rule. It is essential for the SEC to align these definitions with industry standards and technical terms to avoid any unintended consequences. Clarity and precision in defining terms is vital to provide a solid foundation for the proposed rule and ensure consistent interpretation and compliance among all market participants. Ambiguous definitions can lead to varying interpretations and potential loopholes, which negate the goal of enhanced investor protection. In order to mitigate these concerns, I strongly urge the SEC to provide clearer definitions for terms such as digital assets, wallets, validators, and others that are integral to the proposed rule. By doing so, the SEC can facilitate proper understanding and implementation of the rule, minimizing confusion, and potential compliance challenges for investment advisers. In conclusion, while I support the SEC's efforts to safeguard advisory client assets, I believe that addressing the lack of clarity in the definition of digital assets is crucial for the effectiveness and successful implementation of the proposed rule. Clear definitions will ensure consistent interpretation and compliance across the industry, ultimately enhancing investor protection and minimizing risks. Thank you for considering my comment, Raimonds