Feb. 4, 2024
Dear Securities and Exchange Commission, I am writing to express concerns about the Options Clearing Corporation's (OCC) proposed rule change on margin requirements during high market volatility. Margin Call Restrictions: The proposed rule may inadvertently shield imprudent risks during market volatility by restricting margin calls. This could lead to unchecked growth in risky positions, posing a greater threat to market stability. Financial Risk Management Officer's Role and Lack of Transparency: The role of the Financial Risk Management Officer creates a potential conflict of interest. Further, the redacted materials limit transparency, hindering a thorough evaluation of the proposal's effectiveness and stifling an informed public discourse. Loss Allocation Framework: Consider prioritizing Clearing Fund deposits over OCC's pre-funded resources in the loss allocation framework for a more balanced and resilient financial ecosystem. Recommendations: Increase oversight with a more active regulatory role to ensure accountability. Prioritize transparency to build trust and advocate for increased disclosure in risk management reporting. Incorporate public input through consultations for a more democratic decision-making process. Encourage the establishment of industry-wide standards to underscore a commitment to market stability. Advocate for accessible stress testing results to illustrate the effectiveness of risk management measures. Consider establishing an external oversight committee comprised of industry experts to provide impartial evaluation and scrutiny. Collectively these measures aim to strengthen oversight, better transparency, and uphold accountability in the financial markets. I trust the SEC will thoroughly consider these concerns to ensure the rule addresses risk management while upholding market integrity. As an engaged investor, I am committed to a financial environment prioritizing fairness, transparency, and the well-being of all market participants. Thank you for your attention to this matter. Sincerely, Investor