Feb. 2, 2024
To whom it may concern, As a household investor, if I use margin during a high volatility event and am required to add funds to cover the volatility, there is no SEC rule for household investors for this. The brokers certainly will not hesitate to call the marker, in fact in some cases doing so without even first alerting the customer. I am responsible for the risk I have taken and I am responsible for ensuring I am compliant with my brokers rules. Bearing that in mind, market participants, whether they be brokers, clearing houses, hedge funds, et al. should not be exempt from margin calls during volatility. Not one bit, zero. Doing so will lead to real world consequences in already over-leveraged firms abusing the rule. Time and time again this happens. To pass this rule would in effect be a simple killing of any sort of risk mitigation and compliance. It is bad enough that in 2021 we had clearing firms have excess capital requirements waived (Instinet, Robinhoood, others) via the DTCC behind the scenes. Only to find out that it has been going on regularly for a period of years. This is by far the most foolish proposal I have seen come forward. It will be abused without regard to risk, the public will never be told that clearing firms or anyone else defaulted on the leverage and an already opaque system will be made that much darker. Regards, Michael Behrens