Feb. 9, 2024
I am against this rule and it should not be implemented. It is evident by the admission of regulators from the meme run ups, firms are clearly over-leveraged and the regulators should concentrate on deleverage regulatory ideas and understanding (and addressing) the amount of leverage on and off-shore. Implementing an automated rule that recalculates margin requirements due to a market event allows firms a known outcome of never getting margin called. This will encourage these firms to continue to leverage themselves in unsustainable fashion. If the goal is system stabilization, the rule change demonstrates it is the leverage and lack of regulation follow-through and transparency that is the root of the problem, not the calculation of margin requirements. This rule benefits the minority who are operating in the dark that 99% of them would have been margin called in the meme run-up vs. the entire market participants. Are we not here to protect everyone? Eric