Feb. 5, 2024
Ryan Leo February 4th, 2024 Securities and Exchange Commission 100 F Street NE Washington, DC 20549 RE: Comment on SR-OCC-2024-001 34-99393: Concerns Regarding Proposed Rule Change by The Options Clearing Corporation Dear Sir/Madam, I am writing to express my concerns and opposition to the proposed rule change outlined in SR-OCC-2024-001 34-99393, titled “Proposed Rule Change by The Options Clearing Corporation Concerning 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 believe this proposed rule change presents significant risks to market stability, lacks transparency, and raises issues regarding the conflict of interest within the Options Clearing Corporation (OCC). Firstly, the lack of transparency surrounding the redacted materials in the proposal, as evidenced by Exhibit 5 and supporting information in Exhibit 3, hinders public review and prevents meaningful feedback. Transparency is essential for ensuring accountability and maintaining trust in our financial system. Without full disclosure, the public cannot adequately assess the potential impacts of this rule change. Furthermore, the proposed rule appears to prioritize the interests of Clearing Members over the stability of the market. By reducing margin requirements during periods of high volatility, the OCC may be increasing risks to its own stability and exposing non-defaulting Clearing Members to liquidity issues. This approach creates an unfair advantage for Clearing Members while potentially putting the broader market at risk. Additionally, the role of the Financial Risk Management (FRM) Officer raises concerns about conflicts of interest. The OCC’s reliance on the FRM Officer to protect its interests, while also potentially requiring them to prioritize the interests of Clearing Members, creates a conflict that undermines the integrity of risk management processes. In light of these concerns, I urge the Securities and Exchange Commission to thoroughly reconsider the proposed rule change. It is essential to prioritize transparency, risk mitigation, and the overall well-being of the market. I advocate for stricter margin requirements, external auditing and supervision, and a revised loss allocation waterfall to ensure fair and resilient market practices. Thank you for considering my comments on this important matter. All investors benefit from a market that operates fairly, transparently, and with robust risk management practices. Sincerely, Ryan Leo; A Concerned Retail Investor