Feb. 5, 2024
Dear SEC, I hope this letter finds you well. 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 an active participant in the financial markets and a concerned stakeholder, I believe it is crucial to bring to your attention several apprehensions that I have regarding the potential impact of this proposed rule change on market stability, the lack of transparency in redacted materials, and the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer. Firstly, I am deeply concerned about the potential impact of the proposed rule change on market stability. The adjustment of parameters for calculating margin requirements during periods of high volatility has the potential to introduce increased uncertainty and risk into the financial markets. This may lead to unintended consequences, including heightened market turbulence and increased systemic risk. As a responsible regulatory body, it is imperative to ensure that any changes to existing rules are thoroughly scrutinized to prevent adverse effects on market stability. Secondly, the lack of transparency in redacted materials related to the proposed rule change is disconcerting. Transparency is a fundamental principle that underpins the integrity of financial markets. Redacted materials create a barrier to understanding the full implications of the proposed changes, hindering market participants' ability to make informed decisions. I urge the SEC to demand complete disclosure of all relevant information, enabling stakeholders to assess the proposed rule change comprehensively. Furthermore, I am troubled by the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer. Given their pivotal role in assessing and managing financial risks, it is crucial to ensure that their decisions are unbiased and in the best interest of the broader market. The proposed rule change raises concerns about potential conflicts that may compromise the FRM Officer's ability to make impartial judgments. It is essential for the SEC to carefully examine the governance structure and address any conflicts of interest to uphold the integrity of the regulatory process. In light of these concerns, I respectfully urge the SEC to conduct a thorough reconsideration of the proposed rule change. Emphasizing the importance of transparency, risk mitigation, and the overall well-being of the broader market, I believe that a comprehensive review is essential to safeguard the stability and integrity of our financial markets. Thank you for your attention to this matter, and I trust that the SEC will carefully consider the implications of the proposed rule change in the best interest of all stakeholders. Sincerely, Kai Vollenweider