Oct. 31, 2023
Dear Securities and Exchange Commission, I am writing to provide my comment on the proposed rule "Safeguarding Advisory Client Assets." While I commend the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns regarding the lack of clarity on the definition of digital assets and the potential privacy implications associated with the proposed rule. Firstly, I am concerned about the lack of clarity in the definition of digital assets. In an increasingly digital world, it is essential for investors and investment advisers to have a clear understanding of what constitutes a digital asset. However, the proposal fails to provide clear guidance on this matter, leading to confusion and potential misinterpretation. Without a precise definition, there is a risk of overreach or inconsistent application of the rule, which could hinder innovation within the fintech sector. Secondly, I am worried about the privacy and safety implications of allowing multiple third parties to have access to my sensitive financial data and social security number. The proposed rule requires investment advisers to provide notice and account details to clients' custodians. While transparency is crucial in ensuring investor protection, there is a need to strike a balance between transparency and privacy. The indiscriminate sharing of personal information raises concerns about data breaches, identity theft, and potential misuse of sensitive data. Furthermore, the potential risks associated with the proposed rule may disproportionately impact small entities and individual investors. While the SEC has taken steps to consider the impact on small entities, more attention should be given to the potential burdens faced by individual investors. Robust safeguards should be in place to protect the privacy and confidentiality of their financial information. In conclusion, I urge the SEC to provide further clarity on the definition of digital assets and consider the potential privacy implications of the proposed rule. It is vital to strike a balance between investor protection and safeguarding personal data. The SEC should take into account the concerns raised by individual investors and ensure that the proposed rule does not impose unnecessary burdens on them. Thank you for considering my comment. Sincerely, Jens