Feb. 5, 2024
Dear Sirs/Madams, I am writing to convey my apprehensions and dissent concerning SR-OCC-2024-001, particularly regarding the suggested collateral prerequisites for short hedge funds and other institutions. While I acknowledge the significance of capital prerequisites in upholding financial stability, I firmly assert that the collateral requirements as delineated in the current proposal might not be adequately resilient, especially for entities involved in short selling activities. Short hedge funds and institutions wield substantial influence in the financial markets, and their actions can have extensive repercussions. The existing regulatory framework predominantly leans on capital prerequisites to restrain excessive risk-taking. Nonetheless, I contend that bolstered collateral requirements are equally, if not more, pivotal in mitigating systemic risks. The present situation presents a scenario where these funds could function with limited resistance, counting exclusively on capital prerequisites to ensure responsible conduct. Heightened collateral requirements would function as an extra protective layer, serving as a proactive deterrent against unwarranted risk-taking and potential market disruptions. I recommend that the OCC should thoughtfully reassess and possibly elevate the proposed collateral prerequisites for short hedge funds and institutions. This adjustment would not only furnish a more comprehensive risk management structure but also instill greater confidence in the overall solidity of the financial system. I appreciate the OCC's commitment to safeguarding the safety and soundness of the financial markets and have confidence that my comments will be given due consideration throughout the regulatory evaluation process. Yours sincerely, JMB Sent from Proton Mail for iOS