Feb. 3, 2024
To whom it may concern, I am writing to express my deep concerns regarding the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. As a stakeholder invested in market stability and transparency, I believe it is essential to address several critical issues pertaining to this proposed rule change. First and foremost, the potential impact on market stability cannot be overstated. Margin requirements serve as a crucial mechanism for mitigating risk and ensuring the overall stability of financial markets. Altering these parameters, particularly during periods of heightened volatility, has the potential to introduce significant disruptions and exacerbate systemic risks. Given the interconnected nature of global financial markets, any destabilizing effects resulting from these adjustments could have far-reaching consequences. Furthermore, the lack of transparency surrounding certain redacted materials raises serious concerns about the integrity of the decision-making process. Transparency is paramount in fostering trust and confidence among market participants and regulators. Without access to complete and comprehensive information, stakeholders are left in the dark regarding the rationale behind proposed rule changes and their potential implications. It is imperative that all relevant stakeholders have access to the necessary information to make informed decisions and provide meaningful feedback. Additionally, I am troubled by the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer in this context. The role of the FRM Officer is to impartially assess and manage risks within the organization, free from external influences or conflicts of interest. However, the potential for conflicts of interest to arise, particularly in the context of rule changes that may impact the financial interests of the OCC, undermines the credibility and effectiveness of risk management practices. In light of these concerns, I respectfully urge the SEC or a Relevant Regulatory Body to thoroughly reconsider the proposed rule change by the OCC. It is imperative that any regulatory changes prioritize transparency, risk mitigation, and the broader market's well-being. As stewards of financial stability and market integrity, regulators have a fundamental responsibility to ensure that regulatory frameworks are robust, transparent, and in the best interests of all stakeholders. I strongly believe that a thorough review of the proposed rule change, taking into account the concerns raised herein, is necessary to safeguard the stability and integrity of our financial markets. I appreciate your attention to this matter and stand ready to provide any further information or assistance that may be helpful in your deliberations. Thank you for considering my perspective on this important issue. Sincerely, Sun Kyo Lee