Feb. 7, 2024
Dear Sir/Madam, I am writing to provide my input on the proposed rule change by The Options Clearing Corporation (OCC) 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” (File Number: SR-OCC-2024-001 34-99393). I have grave concerns regarding this proposal and strongly oppose its approval. My concerns stem from the lack of transparency evident in the redacted details of the proposal, hindering public review and commentary. Transparency is essential for ensuring the integrity of our financial system, and I believe this proposal falls short in this regard. Moreover, I am troubled by the potential unfairness this proposal may introduce into the marketplace, particularly for retail investors. The repeated reduction of margin requirements for Clearing Members while other investors face long-tail risks creates an uneven playing field. I firmly believe that all market participants should be subject to the same margin requirements to ensure fairness and stability. Additionally, I am concerned about the conflict of interest inherent in the role of the Financial Risk Management (FRM) Officer outlined in the proposal. The obligation to protect the OCC from financial risk while simultaneously safeguarding Clearing Members from failure poses a significant challenge. Rubber-stamping margin requirement reductions for at-risk Clearing Members undermines the very purpose of margin collateral and exposes the OCC to unnecessary risks. Furthermore, the proposal's focus on mitigating potential liquidity issues for non-defaulting Clearing Members raises questions about the OCC's risk management strategies. By reducing margin requirements, the proposal diminishes the OCC's first line of protection—the margin deposits of at-risk Clearing Members—creating a logical inconsistency. In light of these concerns, I urge the Securities and Exchange Commission to reject this proposal or, at the very least, subject it to significant amendments addressing the issues raised herein. Specifically, I recommend increasing and enforcing margin requirements to align with the risks associated with Clearing Member positions, discouraging excessive risk-taking and encouraging responsible portfolio management. Thank you for considering my comments on this important matter. Sincerely, Monica Ramos Bandalux USA 7290 NW 35th Terrace, Miami, FL 33122 (305) 883-0008