Dear Ms. Countryman,

I am writing as a retail investor to petition for amendments to the National Securities Clearing Corporation (“NSCC”) Rules & Procedures under Rule 192 of the SEC’s Rules of Practice. Specifically, I propose revisions to Rules 4, 18, and 22 to enhance settlement protocols, ensure central counterparty (CCP) resilience, and promote financial market stability.

Current NSCC Rules lack strict protocols for closing out positions in the event of a Member default. Rule 18 SEC. 6(a) permits the Corporation to avoid closing out positions if it could disrupt the market, raising concerns about potential manipulation and systemic risks. This discretion can incentivise Members to build large positions, effectively making them “Too Big To Fail,” and shifting the burden of losses to CCPs and the public.

To address these issues, I propose the following changes:

NSCC Rule 4 – Loss Allocation Waterfall:

Obligate executives of a defaulting Member to cover losses up to their compensation from the preceding 5 years.

NSCC Rule 18 – Completion of Close-Outs:

Remove the Corporation's discretion to avoid closing out positions that may disrupt the market.

NSCC Rule 22 – Suspension of Rules:

Option A: Mandate public disclosure of any rule suspensions or waivers.

Option B: Eliminate exceptions to rule enforcement and ensure full public disclosure.

These changes aim to create a fairer, more transparent, and resilient financial system by holding parties accountable for their risks.

Thank you for considering this petition. I respectfully request prompt action on these proposed amendments to protect the interests of all market participants.

Sincerely, gp
A Concerned Retail Investor