May 3, 2024
The proposed rule change by the Options Clearing Corporation (OCC) is deeply concerning and undermines the fairness and stability of the markets. Allowing the OCC to unilaterally reduce margin requirements for at-risk clearing members could lead to widespread fraud and moral hazard. The lack of transparency and accountability exacerbates these concerns, making it difficult to properly assess the proposal's impact. By waiving margin calls for undercapitalized members, the OCC would essentially privatize profits while socializing losses, which goes against the principles of financial responsibility. Additionally, the proposal fails to address the systemic risks posed by overleveraged and undercapitalized firms, instead opting to provide them with even more flexibility. This perpetuates the "too big to fail" mindset that erodes public trust in the financial system. Regulators must prioritize tighter oversight, higher margin requirements, and a decentralized market structure to ensure market integrity and protect investors. Concerned Retail Investor