Feb. 2, 2024
I appreciate the opportunity to respond to Proposed Rule SR-OCC-2024-001 titled "Proposed Rule Change by The Options Clearing Corporation Concerning Its Process for Adjusting Certain Parameters in Its Proprietary System for Calculating Margin Requirements During Periods When the Products It Clears and the Markets It Serves Experience High Volatility" and comment on my overwhelming opposition to said rule. The first glaring issue is that when attempting to examine the corresponding exhibits and documents there are more than 200 pages that are redacted and can't be viewed. In the sake of transparency that is touted as a staple and feature of our financial markets, though consistently lacking, this information needs to be made available for public discussion before any such rule can be considered. This alone should be reason enough to discard this proposed rule. Upon further evaluation of this proposed rule, I have noticed that the proposed changes appear to be crafted in a way to protect Clearing Members from exposure to the risk of bad decisions they may have made. As I referenced previously in my comments to File No. S7-32-10 last August, there are several firms that have an inanely-high amount of over-leveraged exposure to derivatives and pose a threat to the stability of our markets. How can these firms be allowed to create such grand exposure and risk and now, if this rule passes, be allowed to provide less collateral for their margin requirements, which poses a serious threat to the OCC and non-defaulting members? I know that I, as a household investor, would face a margin call the moment my luck turned sour during times of high volatility, and I would assume the following consequences in full. Why should a select few get a free pass when the rest of the market participants do not? It's beyond time for regulators to get the job done and protect investors. If there is an issue of regulatory shortcomings, then that must be addressed and resolved, but I believe that the abuse of positions by some firms is more to blame. If anything, margin requirements should be increased, in times like these, when the uncertainty our economy faces with current, questionable, monetary policy by the Federal Reserve presents a higher probability for periods of high volatility. If a firm cannot manage its portfolio's risk, it should face the consequences of the liquidation rules we already have in place. If that liquidation triggers bankruptcy, then the firm should not be operating in the first place. If persons involved in the risk management office of these firms deliberately engage in bad faith actions and non-compliance of the risk, then they should be removed and jailed. Again, I thank you for the time to present my views and OPPOSITION to proposed rule SR-OCC-2024-001 34-99393 and I hope you consider the ramifications this rule would have and the damage it would cause to investors if passed. Sincerely, Juan B. Business Owner