Feb. 16, 2024
Dear SEC, I trust this email finds you well. As an active participant in the financial markets and an advocate for transparent, fair, and stable market practices, I am writing to express my strong opposition to the proposed rule SR-OCC-2024-001. While I recognize the rule’s intent to formalize the Options Clearing Corporation’s (OCC) process for adjusting parameters during high volatility periods, I am deeply concerned about the lack of transparency. Specifically, the redaction of critical details related to parameter calculations and margin thresholds raises serious questions. Transparency is vital for market participants to assess the fairness and effectiveness of risk management measures. Several aspects of the proposed rule warrant scrutiny. The consistent use of idiosyncratic control settings, the concentration of decision-making authority in the hands of a single FRM Officer, and the potential systemic risks associated with frequent adjustments during high volatility are alarming. As it stands, the proposed rule grants the OCC extensive authority to adjust margin thresholds based on undisclosed parameters during critical events, which could impact margin call requirements significantly. Furthermore, the absence of solicited comments for public input raises doubts about the transparency and fairness of the rule-making process. Robust engagement with stakeholders is essential to ensure well-rounded rules that address concerns from various parties. I strongly urge you to consider the following improvements: Strengthen and enforce margin requirements. Introduce external auditing and supervision as a “fourth line of defense,” enhancing transparency and proactive risk management through public reporting. These measures are crucial for fostering trust among market participants and maintaining the stability and integrity of our financial markets. In conclusion, I firmly oppose the adoption of proposed rule SR-OCC-2024-001 in its current form and encourage a thorough reconsideration of its implications. Thank you for your attention to this matter. Sincerely, Roy Rejingold