Feb. 3, 2024
Dear Securities and Exchange Commision, 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 the integrity and stability of our financial markets, I believe it is imperative to address several critical issues that arise from the proposed adjustments. First and foremost, the potential impact on market stability cannot be understated. The proposed rule change, while purportedly designed to enhance risk management practices, could inadvertently exacerbate market volatility during periods of stress. By adjusting margin requirements based on undisclosed parameters, there is a risk of amplifying market swings and undermining investor confidence, thereby jeopardizing the stability of our financial system as a whole. Furthermore, the lack of transparency surrounding the redacted materials pertaining to the proposed rule change is deeply troubling. Transparency is paramount in fostering trust and accountability within the financial industry, yet the opacity surrounding key aspects of the proposed adjustments raises legitimate concerns about the integrity of the rule-making process. Without access to complete information, stakeholders are left in the dark regarding the rationale behind the proposed changes and are unable to adequately assess their potential implications. Of equal concern is the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer in the rule-making process. As a key decision-maker tasked with overseeing risk management practices, the FRM Officer must adhere to the highest standards of impartiality and integrity. However, the potential for conflicts of interest to arise, given the OCC's dual mandate of protecting market participants while maximizing shareholder value, raises serious questions about the objectivity of the decision-making process. In light of these concerns, I urge the Securities and Exchange Commission (SEC) to thoroughly reconsider the proposed rule change and its potential ramifications. It is imperative that regulatory bodies prioritize transparency, risk mitigation, and the broader market's well-being in their deliberations. As stewards of the financial system, we must uphold the highest standards of governance and accountability to safeguard the interests of investors and ensure the stability and integrity of our markets. In conclusion, I respectfully request that the SEC undertake a comprehensive review of the proposed rule change, taking into account the concerns outlined above. By fostering a regulatory environment grounded in transparency, accountability, and risk management, we can uphold the integrity of our financial markets and promote the long-term prosperity of all stakeholders. Thank you for your attention to this matter. I look forward to your prompt and thoughtful consideration of my concerns. Sincerely, AS