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 understand the aim to enhance investor protections, I believe that certain aspects of the rule may exceed the SEC's regulatory authority and encroach on areas that should be regulated by other agencies. One specific concern I have is regarding privacy. The proposed rule requires investment advisers to provide detailed account information, including custodian information and custodial account numbers, to clients. While I appreciate the goal of transparency and accountability, the requirement to share this sensitive financial data with so many third parties raises concerns about privacy and safety. The potential for misuse or theft of this information is a genuine worry for investors like myself. Furthermore, the proposed rule does not adequately address the potential security risks associated with sharing personal information such as social security numbers. Given the increasing number of cyber attacks and identity theft incidents, it is crucial that the SEC takes robust precautions to safeguard the privacy and security of investors' sensitive information. This consideration should be central to any rule governing the protection of client assets. In addition to my concerns about privacy, I also believe that the SEC needs to carefully assess its regulatory authority in this proposal. The rule expands the coverage to include a broader range of investments, including crypto assets. While it is important to ensure the safeguarding of these assets, it is worth questioning whether the SEC should be the sole entity responsible for regulating this rapidly evolving and complex field. I urge the SEC to work collaboratively with other relevant regulatory agencies, such as the Commodity Futures Trading Commission, to ensure that the safeguarding of client assets, particularly crypto assets, is adequately addressed without undue concentration of regulatory power. This will not only prevent regulatory overlap but also ensure that expertise from different agencies is properly utilized. In conclusion, while I recognize the importance of enhancing investor protections, I believe that the proposed rule "Safeguarding Advisory Client Assets" may exceed the SEC's regulatory authority and raise significant concerns regarding privacy and data security. I urge the SEC to carefully consider these concerns and work in coordination with other regulatory bodies to strike an appropriate balance between investor protection and the jurisdictional integrity of regulatory agencies. Thank you for considering my comments on this proposed rule. Sincerely, Concerned Citizen