May 3, 2024
As a retail investor, I support the SEC's grounds for disapproval of SR-OCC-2024-001 Release No 34-100009, which proposes a rule change by The Options Clearing Corporation (OCC) regarding margin requirement adjustments during high volatility. The rule lacks transparency, with key details redacted, preventing meaningful public review. The proposal shifts risks to the OCC and the financial system by reducing margin requirements for Clearing Members, potentially leading to systemic crises. It also highlights conflicts of interest, as the Financial Risk Management Officer's role prioritizes Clearing Members' safety over the clearing agency's. These issues violate the Exchange Act and do not protect investors or the public interest. To address these concerns, I recommend increasing and enforcing margin requirements for Clearing Members, ensuring governance transparency, and prioritizing the clearing agency's safety over Clearing Members'. Loss allocation should prioritize non-defaulting Clearing Member deposits before OCC's pre-funded resources. Prompt suspension and liquidation of Clearing Members with projected losses exceeding their margin deposits are also crucial. These measures would enhance market fairness, transparency, and resilience. Thank you for considering these comments to protect investors and promote a fair and efficient market.