Mar. 4, 2024
To whom it may concern: I am writing as a concerned retail investor to express my opposition to the proposed rule change by The Options Clearing Corporation (OCC), referenced as SR-OCC-2024-001 34-99393. This proposal aims to adjust parameters in OCC's proprietary system for calculating margin requirements during periods of high market volatility. After a thorough review of the available materials, including the significantly redacted Exhibit 5 and supporting information, I find several aspects of the proposal troubling and believe it warrants a thorough reconsideration by the SEC. The lack of transparency presented in the proposal's documentation is alarming. Significant redactions impede public review and hinder a meaningful understanding and commentary on the changes. Such opacity is unacceptable, especially considering the potential ramifications these adjustments could have on market stability and investor confidence. The proposal's assertion that U.S. regulators have not required prescriptive procyclicality controls further underscores the need for transparency and accountability in these critical regulatory decisions. Moreover, the proposed adjustments seem to prioritize the interests of Clearing Members over the broader market's stability, effectively reducing margin requirements to prevent individual Clearing Member failures. This approach not only undermines the risk management principles that margin requirements are meant to enforce but also introduces systemic risks that could precipitate a wider financial crisis. The recurrence of "idiosyncratic" interventions, as noted in the proposal, suggests a pattern of behavior that could encourage moral hazard among Clearing Members, further destabilizing the market. Additionally, the inherent conflict of interest for the Financial Risk Management (FRM) Officer, as detailed in the proposal, is concerning. The dual mandate of protecting both the OCC's and Clearing Members' interests could compromise the integrity of risk management practices, leading to decisions that may not align with the broader market's well-being. In light of these concerns, I urge the SEC to demand greater transparency and a more rigorous public review process for this and similar proposals. The potential for these rule changes to adversely affect market stability, particularly during periods of high volatility, necessitates a cautious and inclusive approach to regulatory adjustments. The interests of all market participants, including retail investors like myself, should be carefully considered to ensure a fair, transparent, and resilient financial system. I appreciate your attention to these concerns and the opportunity to contribute to the discussion on this critical matter. Sincerely, Tyler Camp