Subject: S7-04-23: Webform Comments from Raimonds
From: Raimonds
Affiliation:

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