Feb. 2, 2024
Dear Sir/Madam, I am writing to express my vehement opposition to the proposed rule change outlined in SR-OCC-2024-001. As a retail investor, I am deeply concerned about the implications of this rule and believe it poses a severe threat to the integrity and stability of our financial markets. Here are several reasons why this rule should not be approved or moved forward with: 1. Lack of Transparency: The opacity surrounding this proposal is alarming and unacceptable. Critical details, including those in Exhibit 5 and supporting information in Exhibit 3, are significantly redacted, hindering public review and preventing meaningful feedback. Without transparency, we cannot ensure fair and informed decision-making within our financial system. 2. Systemic Risk: The proposed rule blames U.S. regulators for not mandating prescriptive procyclicality controls, which could exacerbate market volatility and increase risks for all participants. By allowing margin reductions based on subjective criteria, the rule puts the stability of our financial system at risk and undermines investor confidence. 3. Unfair Advantage for Clearing Members: The proposed rule appears to prioritize the interests of Clearing Members over other market participants, including retail investors. By repeatedly reducing margin requirements and waiving margin calls for Clearing Members facing risk, the rule creates an uneven playing field and distorts market dynamics. 4. Conflict of Interest: The role of the Financial Risk Management Officer becomes compromised under this proposal. Instead of safeguarding the interests of the Options Clearing Corporation (OCC), the officer is pressured to protect Clearing Members from failure, potentially exposing the OCC to greater financial risk. 5. Inadequate Risk Management: By reducing margin requirements and circumventing risk controls, the proposed rule fails to address the underlying issue of insufficient capitalization and excessive leverage among Clearing Members. This laissez-faire approach undermines market stability and encourages reckless behavior. In light of these concerns, I urge the Securities and Exchange Commission to reject this rule proposal and uphold the principles of transparency, fairness, and accountability in our financial markets. We must prioritize the long-term stability and integrity of our financial system over short-term gains for a select few. Thank you for considering my comments. Sincerely, Sam