Feb. 14, 2024
Dear Sir, RE: SR-OCC-2024-001 34-99393 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 Experience High Volatility” As a retail investor I have many concerns about the above OCC rule proposal, and I vote "no" with respect to the proposal because: It does not help in providing any risk control - it only temporarily contains it. If anything, it adds to risk in the long term. It creates much greater systematic risk in the future. It will encourage bad behaviours, as participants will be "living in the risk area" because they know if the criteria is met, there are no consequences, thus creating riskier bets. Instead of this rule change, margin requirements should be updated such that more margin is needed. Within your own document you state that there is a 99% expected shortfall (i.e. practically every participant is getting margin called). To drop the margin requirements lower, say 10% or 5%, the participants should be required to deposit more collateral to lower the expected shortfall amount. They should not be let off the hook because they have too much expected shortfall. Thank you for taking the time to review my concerns. Retail investors need a fair market. Best regards, Mr Herbert