Feb. 4, 2024
I am writing to express my concerns regarding the proposed rule change SR-OCC-2024-001. 1. Redacted details obstruct a free and fair market. 2. Designating Clearing Members, especially those poorly managing risks, as "Too Big To Fail" jeopardizes the financial system's stability. If the markets are fair and free, no business or institutions are too big to fail. Business is business, some win and some lose. 3. Blaming U.S. regulators implies shortcomings, while the actual problem stems from market participants exploiting positions, surpassing regulatory concerns. This has been documented time and time again, only because the punishment for said exploitation and market debauchery is a miniscule fine compared to the profit there of. 4. The role of the Financial Risk Management Officer presents a conflict, compromising impartial risk assessment and management. 5. Reducing margin requirements to shield Clearing Members may heighten risks for the OCC and the broader financial system. 6. Over 200 instances of "idiosyncratic" control settings raise concerns about their consistency and necessity. 7. Impact on OCC's pre-funded financial resources exposes it to financial risks. 8. Uneven playing field as Clearing Members consistently benefit from reduced margin requirements. 9. Reducing margin requirements for at-risk Clearing Members contradicts the OCC's established risk management framework. Suggestions correlate with each, ie. 1. to 1., 2. to 2., and so on 1. Increase and enforce margin requirements to prevent excessive risk-taking. 2. Modify the Loss Allocation waterfall, prioritizing Clearing fund deposits of non-defaulting firms over OCC's pre-funded financial resources. 3. Introduce external auditing and supervision for enhanced transparency with public reporting on a quarterly basis, released in lockstep with earnings for publicly traded companies 4. Strengthen oversight mechanisms, involving regulatory bodies during heightened market volatility. If the SEC can't do what it is supposed to, increase funding and/or create new regulatory agencies to help with oversight of large institutions 5. Establish industry-wide standards for consistent risk management. 6. Provide clearer guidelines for idiosyncratic controls, preventing misuse with a structured evaluation framework. 7. Emphasize enhanced transparency requirements in reporting and decision-making. 8. Advocate for public accessibility of stress testing results to build trust. 9. Incorporate public input through consultations and hearings, fostering inclusivity. 10. Consider establishing an external oversight committee for impartial evaluation and scrutiny. If you're reading this, it's not too late to make the right decision(s) for the greatest country in the world. I just like the stock. Travis Hunt 461 Rimmon St Manchester, NH 03102