Mar. 4, 2024
Dear members of the SEC, I am writing to express my serious 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 stakeholder in the financial markets, I believe this proposed change could have significant and potentially detrimental impacts on market stability and integrity. Firstly, I am apprehensive about the potential impact on market stability that these adjustments could induce. Margin requirements are a critical risk management tool, ensuring that market participants maintain adequate capital to cover potential losses. By altering the calculation parameters during volatile periods, there is a risk that these changes could exacerbate market movements, leading to increased volatility rather than stabilizing the markets. It is imperative that any adjustments to margin requirements are carefully considered and backed by robust analysis to avoid unintended consequences that could destabilize the market ecosystem. Secondly, the lack of transparency in the redacted materials related to the proposed rule change is concerning. Transparent and open regulatory processes are fundamental to maintaining trust in our financial systems. The redaction of critical information impedes stakeholders' ability to fully understand the implications of the proposed changes, evaluate the underlying methodologies, and provide informed feedback. This lack of transparency undermines the participatory nature of financial regulation and could potentially mask significant risks or oversights in the proposed rule change. Furthermore, I am troubled by the inherent conflict of interest associated with the Financial Risk Management (FRM) Officer's role in this context. The FRM Officer's responsibilities include managing risks on behalf of the OCC, which could be in direct conflict with the broader interests of market stability and the well-being of all market participants. Ensuring that the FRM Officer's role and decisions are subject to oversight and aligned with the market's overall health is crucial to maintaining a fair and stable financial environment. In light of these concerns, I respectfully urge the Securities and Exchange Commission to thoroughly reconsider the proposed rule change by the OCC. It is essential to prioritize transparency, engage in comprehensive risk assessment, and consider the broader implications for market stability and integrity. I advocate for a more inclusive and transparent review process that allows for a wider range of stakeholder inputs and a careful examination of the potential impacts of these changes on the financial markets. Thank you for your attention to these important matters. I am committed to supporting regulatory efforts that enhance market stability, transparency, and fairness, and I am hopeful that the SEC will take these concerns into account in its deliberations on the proposed rule change. Sincerely, Jacob Nimocks