Feb. 22, 2024
Dear SEC, I am writing to express my profound concerns regarding the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. As a concerned stakeholder in the financial markets, I believe it is crucial to voice apprehensions regarding potential implications for market stability, lack of transparency in redacted materials, and the perceived conflict of interest associated with the Financial Risk Management (FRM) Officer's role. Firstly, the proposed rule change, as outlined by the OCC, presents significant implications for market stability. Margin requirements serve as a critical tool for risk management, particularly during periods of heightened volatility when market participants are susceptible to increased risk exposure. Altering parameters without comprehensive analysis and stakeholder input may inadvertently exacerbate systemic risk, leading to adverse consequences for market stability and investor confidence. Moreover, the lack of transparency surrounding redacted materials raises substantial concerns regarding the integrity of the proposed rule change. Transparency is essential for fostering trust and accountability within the financial markets. By withholding pertinent information from stakeholders, the OCC undermines the principles of fair and transparent regulation, hindering informed decision-making and potentially exposing market participants to unforeseen risks. Additionally, the inherent conflict of interest associated with the role of the Financial Risk Management (FRM) Officer raises questions about the impartiality and independence of the decision-making process. The FRM Officer's dual responsibility to the OCC and its member institutions may introduce biases that prioritize institutional interests over broader market stability and investor protection. Such conflicts underscore the importance of robust governance mechanisms to mitigate undue influence and ensure regulatory decisions are made in the best interest of the broader market. In light of these concerns, I urge the SEC to conduct a thorough reconsideration of the proposed rule change. It is imperative that regulatory decisions prioritize transparency, risk mitigation, and the overall well-being of the financial markets. I respectfully request that the SEC solicit comprehensive feedback from stakeholders, conduct rigorous impact assessments, and promote transparency throughout the rulemaking process to uphold the integrity and stability of our financial system. Thank you for considering my concerns regarding the proposed rule change by the OCC. I remain committed to fostering a regulatory environment that safeguards market integrity, promotes investor protection, and fosters long-term sustainability. Sincerely, C. Nevarez