Oct. 30, 2023
Public Comment: Safeguarding Advisory Client Assets Proposal To whom it may concern, I am writing to provide my public comment on the Securities and Exchange Commission's proposed rule, "Safeguarding Advisory Client Assets." While I appreciate the SEC's efforts to enhance investor protections and address gaps in the custody rule, I have several concerns and issues that I believe need to be addressed in the final rule. First and foremost, I believe that the proposed rules do not adequately consider self-custody solutions. As an investor, I value being able to maintain control and privacy over my assets. However, the current rules seem to prioritize the use of qualified custodians, which may limit the development of innovative, user-controlled asset management solutions. By not allowing for alternative custody arrangements, the SEC may stifle competition and hinder the development of secure and efficient self-custody options. Furthermore, I am deeply concerned about the privacy and safety implications of the proposed rules. By mandating the disclosure of sensitive financial data and social security numbers to multiple third parties, there is an increased risk of data breaches and identity theft. While I understand the importance of transparency and oversight, it is crucial to balance these concerns with the need to protect personal information and maintain the privacy of investors. In order to address these concerns, I urge the SEC to consider the following recommendations: 1. Provide more flexibility for investors to choose self-custody solutions and consider the potential benefits they offer in terms of enhanced control, privacy, and the development of innovative asset management options. 2. Strengthen provisions related to privacy and data security, ensuring that investor information is protected from unauthorized access and potential misuse. 3. Engage in a thorough analysis of the potential economic impact of the proposed rules, particularly with regards to compliance costs for qualified custodians and small advisors. It is essential to strike a balance between investor protections and the potential burden placed on industry participants. 4. Seek input from industry experts and stakeholders to ensure that all perspectives are considered in the final rule. This will help avoid any unintended consequences and ensure that the rules are workable and effective. In conclusion, I appreciate the SEC's dedication to enhancing investor protection. However, I urge the agency to carefully consider the concerns raised regarding self-custody solutions and privacy issues. By addressing these concerns, the SEC can create a balanced and effective rule that truly safeguards advisory client assets without unnecessarily limiting investor choice and privacy. Thank you for considering my comments. Jack Smith