Feb. 11, 2023
Hello, I am a retail investor writing to express my concerns with SR-OCC-2022-012. I am against this proposal for many reasons. In short, this proposal allows the OCC much greater flexibility in determining the need for margin calls than is necessary or even prudent if we wish to see our capital markets survive periods of extreme (or even minor/acute points of) volatility. A few arguments to consider: 1) Fixed collateral haircuts less accurately represent potential fluctuations in asset values especially with the proposed Historical Value-at-Risk model, because the example history excludes significant periods of market stress (including the 2008 Global Financial Crisis). 2) Margin calculations should consider the possible impact of long tail risks so that the OCC can properly manage those risks. Given the history of its STANS margin calculation method with Monte Carlo simulations, the OCC should consider modifying the current CiM approach to incorporate potential long tail risks. 3) Proposals with significant redactions prevent public review and comment. I understand the need for confidentiality (at times), but this is abhorrent. NOW is the time for transparency. As a retail investor, when I see redactions of large portions of proposed rule changes governing such a critical institution as the OCC, my nose crinkles. I think that's a standard reaction to anybody smelling bull. Thank you for hearing from me. All the best, -- Max Long Content Editor