Feb. 7, 2024
Daz Salar, Flat318, 3 Stillwater Drive, Manchester, M11 4TE, United Kingdom 07/02/2024 Dear Sirs, I am writing to express my deep 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 stakeholder in the financial markets, I believe it is crucial to address the potential implications of such a rule change on market stability, transparency, and the overall integrity of the financial system. First and foremost, I am apprehensive about the potential impact that this proposed rule change could have on market stability. Margin requirements play a critical role in ensuring the soundness of financial markets by mitigating excessive risk-taking and promoting prudent risk management practices. Any adjustments to these parameters during periods of high volatility could significantly increase systemic risk and exacerbate market disruptions, potentially leading to widespread market instability and investor uncertainty. Furthermore, I am deeply troubled by the lack of transparency surrounding the redacted materials related to this proposed rule change. Transparency is essential for maintaining trust and confidence in the financial markets, as it allows stakeholders to fully understand the rationale behind regulatory decisions and assess their potential impact on market participants. Redacting critical information undermines this transparency and raises questions about the integrity and fairness of the rule-making process. Moreover, I am concerned about the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer in this matter. The FRM Officer is tasked with overseeing risk management practices within the OCC, including the determination of margin requirements. However, allowing the FRM Officer to have a significant influence over the calculation of margin requirements, particularly during periods of high volatility, could create conflicts of interest and undermine the independence and objectivity of risk management decisions. In light of these concerns, I urge the SEC to thoroughly reconsider the proposed rule change and conduct a comprehensive review of its potential impact on market stability, transparency, and investor protection. It is imperative that regulatory decisions prioritize the broader market's well-being and uphold principles of transparency, accountability, and risk mitigation. Thank you for considering my concerns. I trust that you will give careful consideration to the issues raised in this letter and take appropriate action to safeguard the integrity and stability of the financial markets. Sincerely, Daz Salar