Feb. 9, 2024
I strongly oppose the OCC's proposed margin rule change (SR-OCC-2024-001). My concerns include: This does not help with risk control it temporarily contains risk and adds long term greater systemic risk. This rule also encourages shorts to indulge in riskier bets. instead of this rule update you should impose higher margin requirements. You've stated that there is a 99% expected shortfall which means imore collateral should be required to lower this expected shortfall amount and not let them shorts off the hook. Limited Transparency: Extensive redactions hinder public review and raise accountability concerns. Risk Shifting: Reduced margins protect Clearing Members but increase risk for the OCC and broader market. Too Big to Fail: Repeated margin relief creates an uneven playing field and potentially makes poorly managed Clearing Members "Too Big to Fail." Conflicted Risk Management: The FRM Officer's dual role. managing both OCC and at-risk Clearing Member interests raises potential conflicts. Proposed Modifications: Increase and enforce risk-based margin requirements. Introduce external auditing and public reporting for proactive risk management. Modify the Loss Allocation waterfall to prioritize non-defaulting member deposits. These changes address transparency, risk management, and fairness concerns, contributing to a more stable market environment. Please thoroughly reconsider this proposal and its potential impact. Thank you, Kimmy Love