Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my deep concerns regarding the proposed rule on "Safeguarding Advisory Client Assets". As a passionate patriot and advocate for the American financial industry, I firmly believe that the proposed rule, while well-intentioned, may inadvertently hamper our nation's ability to lead in the global financial landscape. I fully acknowledge the need to enhance investor protections and address gaps in the custody rule. However, it is crucial to approach this rule with careful consideration of the potential impact it may have on our economy and our position as a leader in innovation and technology. The United States has always been at the forefront of financial advancements, setting the standards for the rest of the world to follow. Our nation's commitment to fair and transparent markets has empowered investors and driven unparalleled economic growth. In light of this, I am concerned that certain aspects of the proposed rule may hinder our ability to harness the full potential of revolutionary technologies like open finance. Open finance platforms hold the promise of transforming the financial industry by creating secure, transparent, and accessible financial ecosystems. These platforms have the potential to attract global attention and investment, bolstering our economy and ensuring our continued status as the world's financial leader. The provisions related to custody of client assets and qualified custodian protections, as outlined in the proposed rule, may inadvertently stifle innovation and limit the benefits of open finance platforms. The expansion of the rule's scope and its application to assets held in a client's account could create regulatory burdens that deter investment advisers from fully embracing this transformative technology. Furthermore, the requirement to demonstrate exclusive control over client assets, particularly in the case of crypto assets, could hinder the seamless integration and functioning of smart contracts within open finance platforms. Embracing the principles of decentralization, rather than imposing traditional custodial requirements, can foster greater collaboration and innovation, ensuring that our nation remains at the forefront of financial technology and the global economy. As we move forward with this rule, it is imperative to strike a delicate balance between enhancing investor protections and fostering an environment that encourages innovation and technological advancement. Engaging in a collaborative dialogue with stakeholders from the open finance community, including investment advisers, developers, and technologists, can provide valuable insights and ensure that any regulatory framework is commensurate with the unique features and benefits of open finance platforms. I respectfully urge the Securities and Exchange Commission to fully consider the potential implications on our nation's economy and technological leadership when finalizing the proposed rule. Let us demonstrate our unwavering commitment to our beloved country by supporting innovation, fostering creativity, and maintaining our position as pioneers in the global financial landscape. Thank you for the opportunity to provide my input on this crucial matter.