Aug. 10, 2022
August 10, 2022 Similar to proposal \"SR-OCC-2022-803\", \"SR-OCC-2022-802\" provides a bureau of the US Treasury, the OCC, with near limitless latitude to raise cash in the event of a defaulting member. The OCC has an obligation to manage the risk of its participants and the investments traded through the OCC. At no point, should a financial contagion scenario be allowed to ensnare others, rather it should be absorbed by those government agencies and participating members who knowingly engaged in a shared default agreement. Please strike down this proposal, as it appears to give wide freedom to socialize losses in the options market that should be absorbed by participating members (and no others). The OCC now believes that it should seek to expand its liquidity facility to increase OCC's access to cash to manage a member default. The OCC already has access to a lot of sources for cash so they want to add to these sources a master repurchase agreement (\"MRA\"). The OCC will require the buyer (e.g., bank or pension fund) to enter transactions as long as neither are in default even if the OCC is exposed by a Clearing Member going broke. This rule would allow the OCC to do this within 60 minutes, even in the event of a default by a Clearing Member or a market disruption. This custom feature means that even if a buyer (e.g., bank or pension fund) fails to deliver purchased securities, OCC can \"mitigate risk with respect to a particular transaction, without declaring an event of default with respect to all transactions under the MRA.\" As a retail investor, I strongly condemn the proposed passage of SR-OCC-2022-802 titled \"Notice of Filing of Advance Notice Related to a Master Repurchase Agreement as Part of The Options Clearing Corporations Overall Liquidity Plan\". I urge you to do the same.