Subject: S7-04-23: Webform Comments from Scott
From: Scott
Affiliation:

Oct. 30, 2023

Dear Securities and Exchange Commission,

I am writing to express my concerns regarding the proposed rule
"Safeguarding Advisory Client Assets." While I applaud the
Commission's efforts to enhance investor protections and address
gaps in the custody rule, I believe there are significant issues that
need to be addressed before these rule proposals can be implemented.

One major concern I have is the lack of consideration for privacy and
security concerns. In today's digital age, where cyber threats
are rampant, it is crucial to ensure that client assets are
safeguarded against unauthorized access and potential breaches. The
proposal does not adequately address the privacy and security concerns
associated with the custody of digital assets, putting investors'
assets at risk.

Additionally, the proposal raises concerns about the privacy and
safety associated with allowing so many third parties to know
sensitive financial data and social security numbers. The collection
and maintenance of such information by investment advisers can be a
cause for concern as it increases the risk of identity theft and
fraud. Therefore, it is essential that the proposed rule include
robust provisions to safeguard clients' personal and financial
information from unauthorized access or misuse.

Furthermore, I am concerned about the SEC overreaching beyond its
mandated responsibilities. While it is important to protect investors
and ensure the integrity of the financial markets, it is equally
important to avoid unnecessary regulatory burdens on investment
advisers that may hinder their ability to serve their clients
effectively. The proposed rule seems to extend the SEC's
jurisdiction beyond what is necessary, placing additional compliance
costs and regulatory burdens on investment advisers without a clear
justification for doing so.

In light of these concerns, I urge the Commission to reconsider
certain aspects of the proposed rule. Specifically, the SEC should:

1. Conduct a thorough analysis of the privacy and security
implications associated with the custody of digital assets, and
incorporate appropriate safeguards to protect client assets from
unauthorized access and potential breaches.

2. Implement stricter requirements for the collection and maintenance
of sensitive client data, ensuring that investment advisers have
robust procedures in place to safeguard this information and prevent
unauthorized access.

3. Review the proposed rule to ensure that it does not exceed the
SEC's mandate and imposes unnecessary regulatory burdens on
investment advisers.

I appreciate the Commission's commitment to enhancing investor
protections, but it is essential that these efforts are balanced with
the need to protect client privacy, promote data security, and avoid
excessive regulatory burdens. I believe that by addressing the
concerns mentioned above, the SEC can achieve a more effective and
balanced regulatory framework that prioritizes investor protection
while minimizing unnecessary compliance costs.

In conclusion, I kindly request the Commission to carefully consider
these concerns and make necessary revisions to the proposed rule. It
is imperative that investor protections are strengthened without
compromising privacy, security, and the ability of investment advisers
to effectively serve their clients.

Thank you for considering my comments. I look forward to the
Commission's response and any further opportunities to provide
input on this crucial matter.

Sincerely,

Scott