Feb. 7, 2024
I am writing to express my significant concerns regarding the Options Clearing Corporation's (OCC) proposed Rule Change SR-OCC-2024-001, which outlines adjustments to the parameters for calculating margin requirements during periods of high market volatility. While I understand the OCC's desire to ensure financial stability, I believe the proposed rule change may have unintended consequences and warrants a thorough reevaluation. Skirting margin requirements will allow entities to place larger riskier bets while reducing the negative consequences losing bets. The casino should not be able to hit the pause button when they are losing. I have concerns with the redacted portions of the proposal. Limited transparency make it difficult to fully assess the potential impact of the rule change. Without full disclosure of the methodology and rationale behind the proposed adjustments, it is impossible to provide informed feedback or ensure fairness and objectivity. There are also conflicts of interest. FRM Officer Role: I am troubled by the inherent conflict of interest associated with the Financial Risk Management (FRM) Officer's role in determining parameter adjustments. The FRM Officer is incentivized to minimize risk to the OCC, but this could come at the expense of broader market stability and participant interests. Alternative Governance Structure: I suggest exploring alternative governance structures for overseeing parameter adjustments, such as an independent committee comprised of diverse market participants. This would mitigate potential conflicts and ensure a more balanced approach to risk management. Recommendations: In light of the concerns outlined above, I urge the SEC to: Request full disclosure of the redacted information in the proposed rule change. Consider alternative governance structures for overseeing parameter adjustments to mitigate potential conflicts of interest. Thank you for your time and consideration.