Feb. 8, 2024
I'm reaching out to share my thoughts on the proposed rule change outlined in SR-OCC-2024-001 34-99393, 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" (PDF, Federal Register). As someone who invests in the stock market, I've taken the time to look into this proposal and have some concerns I'd like to share with you. First off, the lack of transparency in this proposal worries me. When I tried to dig into the details, I found significant redactions in Exhibit 5 and the supporting documents (like Exhibit 3). This lack of transparency makes it hard for retail investors like me to understand what's really going on and provide meaningful feedback. Without clear information and a chance for us to review everything, I don't think this proposal should move forward. I'm also troubled by the proposal's blaming of U.S. regulators for not having strict enough controls. It feels like passing the buck instead of taking responsibility for managing risks effectively. With the potential for increased margin requirements during market stress, we need strong regulations in place to protect investors like me from unnecessary risks. The proposal's reliance on "idiosyncratic" and "global" control settings to manage risk also raises concerns. It seems like this could create an unfair advantage for some investors while putting others at greater risk. As a retail investor, I want a level playing field where everyone has a fair chance to succeed. Given these concerns, I urge the Securities and Exchange Commission to consider making some changes to the proposed rule: Make sure margin requirements are set at levels that reflect the real risks involved, so retail investors like me aren't left exposed to unnecessary dangers. Bring in independent oversight to keep an eye on things and make sure everything is being done fairly and transparently. Prioritize protecting non-defaulting investors and the OCC's financial resources, so we're not left holding the bag if things go south. These changes would go a long way toward creating a safer, fairer market for all investors. Thanks for taking the time to listen to my concerns. Sincerely, Steven J