Oct. 30, 2023
Dear Sir/Madam, I am writing to provide my public comment on the proposed rule "Safeguarding Advisory Client Assets" issued by the Securities and Exchange Commission (SEC). As an individual directly impacted by the SEC's actions, I would like to express my concerns and suggest improvements to the proposed rule. Firstly, I am deeply troubled by the lack of industry expertise exhibited in drafting this proposal, particularly in relation to digital assets and cryptocurrency. The SEC's limited understanding of the unique characteristics of the digital asset industry raises serious concerns about the effectiveness and feasibility of the rule. It is imperative that the SEC consults industry experts and blockchain technologists before implementing any regulations related to these emerging technologies. Another significant concern I have centers around the issue of privacy. The proposed rule requires the disclosure of sensitive financial data and social security numbers to multiple third parties. This not only poses significant risks to individual privacy but also increases the likelihood of identity theft and other financial crimes. I urge the SEC to carefully consider the privacy implications of this rule and ensure that adequate safeguards are in place to protect individuals' sensitive information. Furthermore, the SEC's actions have had a detrimental effect on my financial well-being. The proposal fails to take into account the potential negative impact on investors who rely on digital assets as part of their investment portfolio. The lack of understanding of the industry's dynamics and the resultant restrictive regulations hinder innovation and impede the ability to fully harness the potential benefits of digital assets. In terms of the economic analysis provided by the SEC, I find it inadequate and incomplete. The analysis overlooks the potential costs incurred by individuals, particularly in terms of compliance burdens, when it comes to implementing the proposed rule. It is crucial for the SEC to conduct a comprehensive economic analysis to accurately assess the implications of the rule on various stakeholders, including individual investors. Furthermore, the proposal, as it stands, presents challenges in terms of cost burdens and compliance requirements. The complexity and potential costs associated with implementing the rule may disproportionately affect small entities and independent investment advisers, stifling competition and limiting options available to investors. The SEC should consider the potential impact on small entities and explore reasonable alternatives to mitigate the regulatory burdens imposed by the proposed rule. I appreciate the opportunity to provide my comments on this important matter. It is my hope that my concerns are taken into account and addressed in the final rule. The SEC has a vital role in safeguarding investor interests, and it is crucial that any regulations reflect a comprehensive understanding of the industry and strike a balance between investor protections and fostering innovation. Thank you for considering my input, and I trust that the SEC will carefully evaluate the concerns raised by various stakeholders before finalizing the rule. Reach out if you have further questions or if there are any general questions that I can provide information on about the proposal. Sincerely, Joseph Montero