Subject: SR-OCC-2024-001
From: Matteo Ragno
Affiliation:

Mar. 2, 2024

I am writing to express my deep 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 participant in the financial markets, I believe it is
essential to voice apprehensions regarding potential impacts on market
stability, transparency issues surrounding redacted materials, and the
inherent conflicts of interest associated with the role of the
Financial Risk Management (FRM) Officer.

Firstly, the proposed adjustments to margin requirements during
periods of high market volatility raise significant concerns about
market stability. While adjustments may be deemed necessary to manage
risk effectively, any changes to margin requirements must be
implemented cautiously to avoid unintended consequences such as
increased market volatility and systemic risk. The potential for
abrupt changes in margin requirements could lead to market
participants being caught off-guard, resulting in market disruptions
and heightened volatility. Such instability could undermine investor
confidence and have far-reaching implications for the broader
financial system.

Furthermore, the lack of transparency surrounding redacted materials
is troubling. Transparent governance processes are essential for
maintaining trust and confidence in the regulatory framework governing
financial markets. Without access to complete information regarding
the rationale behind proposed rule changes and the factors considered
in the decision-making process, market participants are left in the
dark and unable to fully assess the potential implications for their
operations and risk exposure. Transparency fosters accountability and
ensures that regulatory decisions are made in the best interests of
all stakeholders.

Additionally, the role of the Financial Risk Management (FRM) Officer
introduces inherent conflicts of interest that warrant careful
consideration. As a key decision-maker responsible for assessing risk
and implementing risk management strategies, the FRM Officer must
remain impartial and prioritize the broader market's well-being.
However, the potential for conflicts of interest arises when
individuals responsible for risk management also have vested interests
in the financial outcomes of their decisions. Such conflicts undermine
the integrity of risk management processes and may lead to decisions
that prioritize short-term gains over long-term stability.

In light of these concerns, I urge  the SEC/Relevant Regulatory Body
to thoroughly reconsider the proposed rule change by the OCC. It is
imperative that regulatory decisions prioritize transparency, risk
mitigation, and the broader market's well-being. I respectfully
request that the SEC/Relevant Regulatory Body undertake a
comprehensive review of the proposed rule change, soliciting feedback
from a diverse range of market participants and experts to ensure that
any adjustments to margin requirements are well-founded, transparent,
and promote market stability.

Thank you for considering my concerns. I trust that the SEC/Relevant
Regulatory Body will give due diligence to this matter and take
appropriate steps to safeguard the integrity and stability of our
financial markets.

Sincerely,

Matteo Ragno