Oct. 22, 2023
Dear Securities and Exchange Commission, I am writing to express concerns regarding the proposed rule on "Safeguarding Advisory Client Assets." While the rule aims to enhance investor protections and address custody gaps, I am concerned that it does not adequately consider the unique characteristics of tokenized debt instruments and digital assets, such as cryptocurrencies, which have the potential to transform finance. Tokenized debt instruments have emerged as innovative financial products that aim to provide more efficient access to capital and liquidity. However, the proposed rule does not adequately address the specific challenges and opportunities associated with these instruments. This lack of consideration may inhibit their development and adoption, ultimately limiting potential benefits for investors and the broader financial system. One major issue is the lack of clear guidance regarding the application of the rule to crypto assets. With the increasing use of digital assets in investment portfolios, it is crucial to establish comprehensive regulations that specifically address the unique characteristics and risks associated with these assets. Failure to provide clear guidelines in this regard may lead to confusion and hinder the growth of this emerging asset class. Another concern is the potential impact of the proposed rule on the freedom of payment. Digital assets offer a decentralized and borderless means of transferring value, which can provide significant benefits in terms of efficiency and accessibility. Any regulatory measures should carefully balance the need for investor protection with the fostering of innovation and the free flow of capital. It is essential that the SEC thoroughly considers the implications of the proposed rule on tokenized debt instruments and digital assets. A failure to do so may stifle the development of new financial technologies and hinder the potential benefits they can bring to investors and the financial industry as a whole. I urge the SEC to engage in further dialogue with industry participants, stakeholders, and experts in the field of digital assets to ensure that any regulation strikes an appropriate balance between investor protection and innovation. Moreover, I encourage the SEC to explore alternatives or exemptions specifically designed to accommodate the unique characteristics and risks associated with tokenized debt instruments and digital assets. In conclusion, the proposed rule on "Safeguarding Advisory Client Assets" falls short in adequately considering the unique characteristics of tokenized debt instruments and digital assets. It is crucial that the SEC addresses these concerns to avoid impeding the development and adoption of innovative financial products. I appreciate the opportunity to provide input on this matter and urge the SEC to carefully consider the points raised. Sincerely, René Wagner