Oct. 30, 2023
Dear Sir/Madam, I am writing to submit a public comment on the proposal titled "Safeguarding Advisory Client Assets" (B5-315 Wholesale other intermediate products, gas schedule Z code "Tariffs on the code") by the Securities and Exchange Commission (SEC). While I appreciate the intentions behind the proposed rule, I have concerns regarding potential overreach of regulatory authority and the treatment of digital assets or cryptocurrencies. Firstly, the proposed rule may exceed the regulatory authority granted to the SEC and encroach upon areas that should be regulated by other competent agencies. It is essential to ensure that each regulatory body operates within its designated scope to prevent the creation of unnecessary overlaps and conflicts. By exerting authority beyond its intended purpose, the SEC risks impacting the efficient and effective functioning of the respective agencies that are better suited to oversee particular areas or types of investments. Secondly, the proposed rule raises concerns regarding the treatment of digital assets, particularly cryptocurrencies that operate on blockchain technology. Digital assets have transformed and disrupted traditional finance, providing new opportunities for investors and fostering innovation. However, the regulatory environment surrounding these assets remains uncertain, and it is crucial for the SEC to approach this issue with caution. While it is essential to enhance investor protections in an evolving landscape, it is equally important to strike the right balance and avoid stifling innovation and growth. Any regulations pertaining to digital assets should be thoughtful, taking into account the unique characteristics and specific challenges they present. The SEC ought to collaborate with relevant stakeholders, including industry experts and technologists, to develop comprehensive and effective regulatory frameworks that provide certainty while supporting innovation. The proposed rule must also consider the potential unintended consequences that may arise from burdensome compliance requirements. Excessive regulation could have adverse effects on market participants, particularly smaller entities who may struggle to navigate complex regulatory landscapes. To ensure that regulation achieves its intended goals, it is crucial for the SEC to undertake a thorough analysis of the costs and benefits associated with the proposed rule, weighing any potential adverse effects on the economy, competition, and capital formation. Furthermore, I urge the SEC to place sufficient emphasis on clear guidance and transparency throughout the implementation of the proposed rule. Ambiguities or uncertainties surrounding compliance requirements can deter market participants from engaging in investment activities or introducing new products and services. Sufficient guidance and clarity will foster a regulatory environment that promotes compliance while encouraging market participants to innovate and support the growth of the financial industry. In conclusion, I appreciate the SEC's efforts to enhance investor protections through the proposed rule. However, I urge the commission to exercise caution to prevent potential overreach of regulatory authority and to provide clear guidance that accommodates innovation in digital assets. By striking the right balance, we can achieve a regulatory environment that safeguards the interests of investors while supporting the growth and development of the financial industry. Thank you for considering my comment. I trust that you will take all perspectives into account as you consider the finalization and implementation of the proposed rule. Yours sincerely, Connor Liam Roche