May 4, 2024
Sirs, Thank you for your continued work to facilitate free and fair markets. As an individual household investor, I value the protections that your work can provide. I agree with your disapproval of 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." This proposed rule change by the Options Clearing Corporation (OCC) is counter to fair and orderly markets and should be rejected. Allowing the OCC to reduce margin requirements for clearing members at risk of default may sound like a safeguard for our markets, but in fact incentivizes bad behavior, allowing clearing members to take on extreme risk with no repercussions to themselves, instead passing those negative impacts to other market participants. Risk controls are a safeguard for the entire market, and allowing the OCC to choose when to ignore them exposes itself and the entire system to increased, more serious failures in the long run. Rather than enable this type of socialized risk-taking, regulators should: 1) Mandate higher margin requirements commensurate to the risks clearing members incur. 2) Subject the OCC to binding external audits and oversight. 3) Instate a process for shuttering insolvent clearing members before risk socialization spreads. Thank you for working to uphold the principles of free and fair markets by rejecting this proposal outright and charting a course toward truly accountable markets. Regards, Tom Dagenais