Feb. 3, 2024
Dear Securities and Exchange Commission, I'm writing to express my opposition to the proposed rule change, SR-OCC-2024-001, by the Options Clearing Corporation. The redaction of details in the proposal raises concerns about transparency and accountability, attributing the need for adjustments to regulatory failures while overlooking market participant abuses like excessive naked shorting. Reducing margin requirements to protect Clearing Members may inadvertently heighten risks for the OCC and the broader financial system. The proposal's uneven playing field benefits Clearing Members, making them "Too Big To Fail" and posing potential risks to financial stability. Concerns also arise regarding the role of the Financial Risk Management Officer, tasked with safeguarding OCC's interests and at-risk Clearing Members, raising questions about impartial risk assessment. In light of these issues, I propose increasing and enforcing margin requirements, introducing external auditing, and modifying the Loss Allocation waterfall to enhance transparency and proactive risk management. These modifications aim to address concerns and contribute to a more stable market environment. I urge the SEC to thoroughly reconsider the proposed rule, taking into account potential implications on market participants and the broader financial system. Thank you for addressing this concern. Sincerely, John L. Schaeffer