Feb. 4, 2024
Dear Sir/Madam, I am writing to express my concerns about the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. The proposed rule change, while seemingly aimed at enhancing market stability, could potentially have the opposite effect. The adjustment of margin requirements during periods of high volatility could inadvertently exacerbate market fluctuations, leading to increased instability. This is particularly concerning given the interconnectedness of our financial markets and the potential for systemic risk. Furthermore, the lack of transparency in the redacted materials associated with the proposed rule change is troubling. Transparency is a cornerstone of effective regulation and is essential for market participants to understand the implications of rule changes. The redacted materials make it difficult for market participants to fully assess the potential impact of the proposed rule change. In addition, there appears to be an inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer. The FRM Officer, while tasked with managing risk, is also a part of the organization that stands to benefit from the proposed rule change. This conflict of interest could potentially compromise the objectivity and effectiveness of the FRM Officer's role. In light of these concerns, I respectfully urge the SEC to reconsider the proposed rule change. It is crucial that any rule change prioritizes transparency, risk mitigation, and the broader well-being of the market. I believe that a thorough reconsideration of the proposed rule, with these principles in mind, will serve the best interests of all market participants. Thank you for your consideration, ZK.