Feb. 7, 2024
Thank you for the opportunity to comment on SR-OCC-2024-00134-99393 entitled "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 experienced high volatility" as a retail investor i have many concerns regarding the OCC rule proposal and appreciate the opportunity to comment. A clearing Member who made bad bets on Wall St could trigger a systemic financial crisis because clearing members as a whole are all risking more than they can afford to lose. Fundamentally these rules create an unfair marketplace for other market participants, especially retail investors, who are forced to face the consequences of long-tail risks while the OCC repeatedly waives margin calls for clearing members by repeatedly reducing their margin requirements. For this reason, this rule proposal should be subject to strictly defined margin requirements as other investors are. Also the lack of transparency in our current Market system evidenced by this rule proposal and many others is deeply concerning. The details of this proposal are significantly redacted which prevents public review making it impossible for the public to meaningfully review and comment further on this proposal. Without opportunity for a full public review, this proposal should be rejected on that basis alone. This rule proposal appears designed to protect clearing members from realizing the risk of potentially costly trades by automatically approving the reductions in margin requirements as required by clearing members which would increase risks to the OCC. That clearly codifies an inherent conflict of interest for the Financial Risk Management officer whose position is allegedly to protect the OCC's interest. Clearing Member failure is a natural disincentive against excessive leverage and insufficient capitalization as others in the market will not cover their loss. If this proposal is approved, mitigating the margin requirements directly reduces the first line of protection for the OCC, margin collateral from at risk clearing members, so this rule proposal should be rejected, until made fully transparent for the public to view.