Aug. 10, 2022
August 10, 2022
There are a number of very concerning aspects to this proposal by the OCC. It appears as though they want to allow themselves to access (read, plunder) pension and insurance funds to pay off their financial obligations should one of the members experience a default, rather than use their members own funds. This brings multiple concerns up for me. Is the OCC allowing members to take on such extravagant amounts of risk that they don't have enough funds in order to cover their bets should they go bad? Is the OCC allowing behavior from its members that is creating systemic risk in our financial markets? Is there an issue in how the OCC, and its members, are being governed and regulated?
This proposal seems to be the OCC trying to avoid responsibility and accountability for themselves and their members, instead using the funds of Main St. without even informing them. How many times does Wall St. get bailed out at the expense of threatening the financial security of everyday Americans?
I urge the SEC to seriously consider the impact this rule would have if approved, and how it would effect normal folks. Let Wall St. own their mistakes. Don't let Wall St. use the retirement savings and insurance funds of Main St. as their piggy bank when their bad bets come due.
Some of the verbiage in the proposal that is especially concerning to me:
\"In the event of a Clearing Member default, OCC would be obligated to make payments, on time, related to that member's clear transactions. ... OCC now believes that it should seek to expand its liquidity facility to increase OCC's access to cash to manage a member default.\"
\"OCC would only enter into confirmations with an institutional investor that is not a Clearing Member or affiliated bank, such as pension funds or insurance companies, in order to allow OCC to access stable and reliable sources of funding...\"
\"The proposed change would allow OCC to seek a readily available liquidity resource that would enable it to, among other things, continue to meet its obligations in a timely fashion and as an alternative to selling Clearing Member collateral under what may be stressed and volatile market conditions.\"
Thank you for the opportunity to comment on this proposal, and thank you for taking the time to read my thoughts on this matter.