Oct. 30, 2023
Dear Securities and Exchange Commission, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets" (File No. S7-XX-XX). I have some concerns regarding certain aspects of the proposed rule, which I believe need further consideration for the successful implementation of enhanced investor protections. Firstly, I would like to address the need for clarity in defining digital assets within the proposed rule. While the overall objective of enhancing investor protections is commendable, I believe that providing a precise and comprehensive definition of digital assets is crucial to avoid confusion and potential misinterpretation by both investment advisers and investors alike. Establishing clear guidelines in this area would be highly beneficial for effective compliance and understanding. Another concern that I would like to highlight is the potential privacy implications arising from the safeguarding of client assets. The proposed rule requires investment advisers to share sensitive financial information, including account details and custodial information, with multiple third parties. This raises significant privacy and security concerns, as it exposes personal and sensitive information to a wide range of entities. Protecting the confidentiality and security of clients' financial data is of utmost importance. To address these concerns, I strongly urge the SEC to consider implementing robust safeguards and protocols to ensure the privacy and security of client information. Enhanced encryption methods, secure data storage, and limited access to sensitive information should be key considerations to alleviate potential risks of unauthorized access and misuse. Furthermore, I would like to express my concern regarding the potential concentration of financial autonomy that the proposed rule can afford to investment advisers. While it is essential to enhance investor protections, it is equally important to establish adequate checks and balances to prevent any potential abuse or misuse of this newfound autonomy. Implementing stricter regulations and introducing more frequent reporting can help monitor and verify investment advisers' actions, ensuring investor confidence and trust. In addition to these specific concerns, I kindly request the SEC to thoroughly assess the potential economic impact and compliance costs associated with the proposed rule. Striking a careful balance between enhancing investor protections, fostering industry competition, and promoting capital formation is crucial for the success of this rule. Therefore, it is essential to conduct a comprehensive economic analysis, explore alternative approaches, and seek feedback on potential overlooked benefits or costs. In closing, I believe that the proposed rule "Safeguarding Advisory Client Assets" has the potential to enhance investor protections in the advisory industry. However, it is crucial to address the concerns raised, including defining digital assets clearly, ensuring the privacy of client financial information, and implementing adequate checks and balances to prevent potential misuse of financial autonomy. By considering these suggestions, the SEC can ensure the final rule strikes an appropriate balance, safeguarding both investor interests and the competitiveness of the industry. Thank you for considering my comments. I appreciate your attention to these matters. Sincerely, Antoine