Feb. 5, 2024
Dear SEC official, I am writing to express my concerns regarding the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. As a concerned participant in the financial markets, I believe it is imperative to address the potential implications of this proposed rule change on market stability, transparency, and the inherent conflicts of interest that may arise. Firstly, I am apprehensive about the potential impact that adjusting margin requirements during periods of high market volatility may have on market stability. While I understand the need for risk management measures, it is crucial to ensure that any changes made do not exacerbate market volatility or create unintended consequences. The proposed rule change could potentially lead to increased market uncertainty and systemic risks, which could ultimately undermine the stability of the financial markets. Secondly, I am troubled by the lack of transparency surrounding certain aspects of the proposed rule change. In reviewing the redacted materials related to this proposal, it has become apparent that there is a significant lack of information available to market participants regarding the rationale behind the proposed changes and the potential implications for market participants. Transparency is essential for maintaining market integrity and ensuring that all stakeholders have access to relevant information to make informed decisions. Furthermore, I am concerned about the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer in the proposed rule change. Given the pivotal role that the FRM Officer plays in assessing and managing financial risks within the OCC, there is a potential conflict of interest if the same individual is responsible for proposing and implementing rule changes that may directly impact the OCC's financial interests. This conflict of interest raises questions about the impartiality and objectivity of the proposed rule change process, which could undermine market confidence and trust in the regulatory framework. In light of these concerns, I urge the SEC to thoroughly reconsider the proposed rule change by the OCC. It is essential to prioritize transparency, risk mitigation, and the broader market's well-being in any regulatory decision-making process. I strongly believe that a thorough review of the proposed rule change, taking into account the concerns raised regarding market stability, transparency, and conflicts of interest, is necessary to safeguard the integrity and stability of the financial markets. Thank you for considering my concerns. I trust that the SEC will give careful consideration to the issues raised in this letter and take appropriate action to address them. Sincerely, Timothy Johnson, a concerned investor