Feb. 3, 2024
Dear Securities and Exchange Commission, I am writing to communicate opposition to the proposed rule change by the Options Clearing Corporation, as described in SR-OCC-2024-001. Far too many details are redacted in the proposal. This defeats transparency and effectively prevents public comment. It also obfuscates the most insidious issues -- e.g. naked shorting. The proposal to reduce margin requirements will likely have the side effect of increasing risks for, and reducing the stability of, the entire financial system. Moreover, in an environment where Clearing Members benefit from reduced margin requirements, other market participants are necessarily at a major disadvantage. I propose the following modifications to the rule: * Increase and enforce margin requirements to align with Clearing Member risks. * Implement external auditing. * Modify the Loss Allocation waterfall by prioritizing Clearing fund deposits of non-defaulting firms. Thank you for your time and consideration. Sincerely, Erik Schwartz