Feb. 3, 2024
Rejection of Proposed Rule SR-OCC-2024-001 34-99393 To whom it may concern: With this letter, l am expressing strong disapproval of the proposed rule change by the Options Clearing Corporation (OCC) to codify its process for adjusting certain parameters in its proprietary system for calculating margin requirements during periods when the products it clears and the markets it serves experience high volatility. As a retail investor, I have several concerns with this proposed rule change. Due to redacted parts within the proposal as well as in supporting information, it is unclear whether the proposed changes are necessary or will be effective in achieving their stated objectives. The OCC rule proposal seems to protect Clearing Members from realizing the risk of potentially costly trades via reductions in margin requirements as required by Clearing Members, which would increase risks to the OCC. This could have a significant negative impact on market participants, including retail investors. Clearing Member failure is a strong disincentive against excessive leverage and insufficient capitalization as others in the market will not cover potential loss. The OCC proposal states that special margin reduction procedures exist because a single Clearing Member defaulting could result in a cascade of Clearing Member defaults potentially exposing the OCC to financial risk. Clearing Members who fail to properly manage their portfolio risk against long tail events become "too big to fail". With all the data provided and parts intentionally redacted by the OCC, I believe that the proposed rule change is flawed, unnecessary, ineffective, and could have a negative impact on market participants and thus should be rejected. I am urging the SEC to carefully consider my concerns and take appropriate action. Thank you for your time and attention to this important matter. JPS