Oct. 23, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns regarding the proposed rule on safeguarding advisory client assets. While I believe that investor protections and the safeguarding of client assets are important, I have identified several issues with the rule that I believe need to be addressed effectively. One major concern is the rule's lack of consideration for global regulatory standards for digital assets, such as cryptocurrencies. This could lead to fragmentation and hinder cross-border transactions. It is crucial that regulatory frameworks for digital assets align with international standards to ensure a cohesive and efficient market. Additionally, the proposed rule may impose challenges for investment advisers in demonstrating exclusive control over crypto assets. As the market for digital assets evolves rapidly, regulations should be flexible enough to adapt to new technologies and innovations. Imposing rigid control requirements could impede the growth of the digital asset market. Furthermore, the burden of compliance, particularly relating to recordkeeping and reporting, raises concerns about the costs and administrative burdens for investment advisers. It is important to enhance investor protections and oversight, but also consider the potential impact on small entities and the competitiveness of the advisory industry. I urge the Securities and Exchange Commission to carefully consider these concerns and strive for a balanced approach in the final rule. Aligning the regulations with global standards for digital assets, embracing technological advancements, and ensuring practical and proportionate compliance requirements will lead to robust investor protections without stifling innovation. Thank you for considering my comments on this proposal. Sincerely, Simon Berger