Aug. 02, 2022
To whom it may concern, I would like to submit the following comment regarding the SR-OCC-2022-803 proposal: Options contracts are derivates that carry extremely significant risk. The Commission, as well as anyone working on the financial industry knows this. The OCC usually is shielded from this risk on its daily operations, but is vulnerable to systemic events. Its preposterous that the OCC now seeks to access to cash from sources that are by their very nature risk averse and do not invest in risky options trading. It's outrageous that they want to meddle with funds that shy away from high risk investments. This is clearly because the OCC is now under pressure because SOMEONE risky bets led to increased stress liquidity demands as they themselves admit: \"in response to increased stressed liquidity demands\" in 2021 alone, it already had to increase the Cash Clearing Fund Requirement \"from $3.5 billion to $4 billion in July 2021, and from $4 billion to $5 billion in October 2021\". Maybe instead of trying to drag everyone down with them, the OCC should discipline their participants so that they do not engage in more risk seeking strategies. Otherwise, this will simply make a localized threat a systemic one. Maybe the OCC should act responsibly as well and enact limits on its participants. What an innovative thought. If they are not doing this it seems that they are uncapable of trimming down their member's risk exposure. Options clearing corporations are already uniquely exempt within UCC 8-504 from the duty to maintain financial assets. Between this and the above admissions of financial stress, the Commission would be extremely irresponsible to approve the OCC request expanding their sphere of risk to also put at risk products such as pension funds. The risk profile that investors expect from their pension funds is NOT that of a stressed options counterparty. Approving this request would be akin to criminal behaviour. I will reiterate that approval of this filing would be a clear and eminent dereliction of the Commission's duty towards pension fund holders and other investors of low-risk appetites. All the best, Dr. Pedro Rosmaninho