Mar. 4, 2024
Dear Securities and Exchange Commission, Thank you for the opportunity to comment on 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”. I am writing to express my grave concerns on the OCC rule proposal, HIGHLY OPPOSE THIS PROPOSAL, AND DO NOT SUPPORT IT'S APPROVAL!. As a vigilant investor deeply committed to market stability and fairness, I am troubled by the potential ramifications of the proposed changes, particularly in the context of the current all-time high market pricing. One proposal that particularly alarms me is the suggested reduction in the minimum margin requirement for securities options. Margin requirements serve as a crucial safeguard against excessive leverage and systemic risk. By lowering these requirements, there is a significant risk of enabling more unnecessary dilution to occur, particularly at a time when market pricing is already at unprecedented levels. Allowing for lower margin requirements could potentially fuel speculative behavior and increase market volatility. It could also exacerbate the risk of market manipulation and create an environment where investors are more exposed to significant losses. This is especially concerning given the current market conditions, where valuations are stretched and vulnerabilities may be heightened. Furthermore, a lower margin requirement could incentivize market participants to take on excessive risk without fully understanding the potential consequences. This not only poses a threat to individual investors but also undermines the integrity and stability of the financial markets as a whole. In light of these concerns, I urge the Securities and Exchange Commission to carefully consider the potential impact of lowering margin requirements, especially in a market environment characterized by all-time high pricing. It is essential that any regulatory changes prioritize the long-term health and stability of the financial markets, rather than potentially exacerbating existing vulnerabilities. I implore the Securities and Exchange Commission to proceed with caution and to engage in thorough analysis and stakeholder consultation before making any decisions regarding regulatory changes. The integrity of our financial system and the protection of investors depend on it. Thank you for considering my concerns. I trust that you will give this matter the attention it deserves and take appropriate action to safeguard the integrity and stability of our financial markets. Sincerely, James Kosa