Oct. 29, 2023
Dear Securities and Exchange Commission, I am writing to express my concerns and raise several issues regarding the proposed rule titled "Safeguarding Advisory Client Assets." While it is commendable that the aim of the rule is to enhance investor protections and address gaps in the custody rule, I believe it is important to consider the potential implications for the future competitiveness of the United States in the rapidly evolving landscape of financial technology innovation. As we witness a global shift towards digitalization and the rise of innovative financial technologies, it becomes increasingly crucial for the United States to create a regulatory framework that encourages and fosters innovation while safeguarding investor interests. Failure to do so could potentially result in a loss of America's hegemony in the financial industry, as other nations adopt more forward-thinking and accommodating regulatory regimes. The proposed rule should be viewed as an opportunity to position the United States at the forefront of fintech innovation and to establish itself as a global leader in this rapidly growing field. By taking a proactive approach to regulating the custody of client assets in relation to innovative financial technologies, the SEC can help instill confidence in investors and attract further investment in the United States. This, in turn, will foster economic growth and maintain America's competitive edge in the global market. Furthermore, it is essential to strike a balance between protecting investors and providing a conducive environment for fintech startups and entrepreneurs to thrive. Excessive and rigid regulatory measures could stifle innovation and drive talent and capital away from the United States towards more accommodating jurisdictions. The proposal should be tailored to ensure that it does not disproportionately burden smaller fintech companies, allowing them to continue to offer innovative solutions while adhering to necessary regulatory safeguards. Additionally, it is crucial to consider the international implications of these rules. As the fintech industry knows no boundaries, it is essential for the United States to align its regulatory approach with international standards and best practices. This will help to ensure the interoperability and harmonization of financial services globally, further bolstering America's position as a leader in the field. In conclusion, I urge the Securities and Exchange Commission to approach the proposed rule with a forward-thinking mindset and a recognition of the potential impact on America's hegemony in the global financial industry. By creating a regulatory framework that supports and encourages fintech innovation while safeguarding investor interests, the United States can maintain its position as a global leader in finance. It is imperative that we seize this opportunity to stay ahead in the rapidly changing landscape of finance and secure America's future economic prosperity. Thank you for considering my comments. Sincerely, Sabine Faldon