Feb. 7, 2024
Hello, As a retail investor, I don't understand what the benefit would be in terms of stability for the markets overall. This rule seems designed to protect bad bets. By not allowing margin calls to occur, it allows these bad bets to grow larger and larger creating potentially even bigger concerns for when putting the thumb on the scale just won't work. The FRM Officer seems to have an inherent conflict of interest--they want to protect OCC and its interest over the wider risk to the overall market these bad bets represent. There own proposal calls out "Only one risk factor had 2-day expected shortfall short coverage under 99% while on idiosyncratic control settings that would have been above 99% on regular control settings, driven by one additional 2-day expected shortfall short exceedance." All the pertinent materials to further evaluate this rule are REDACTED--how can anyone truly judge if this proposal is effective or not? With these redactions in place, we do not receive the appropriate transparency and information needed. That only leads to cause for further questions and concern. Instead, we should focus on increasing transparency and external oversight. In the case of "idiosyncratic" events (case in point $GME) the cause is often attributable to, simply, highly-leveraged, bad bets. If the focus is on improving transparency and oversight on those mechanics (along with actual consequences tied to a firm's improper or illegal risk management) you would create a lot more stability and market fairness than what the OCC is requesting with this. Thank you