May 4, 2024
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"comment": "Comments on SR-OCC-2024-001 34-100009
As a retail investor,
I **SUPPORT** the SEC's grounds for disapproval under
consideration as I have several concerns about the OCC rule proposal,
do not support its approval, and appreciate the opportunity to
contribute to the rulemaking process to ensure *all* investors are
protected in a fair, orderly, and efficient market. I’m very
concerned about the lack of transparency in our financial system as
evidenced by this rule proposal, amongst others. Are we to continue to
allow theft in our markets from abusers, proposers of this rule, this
theft from our everyday hard working mothers, fathers, American
families? I am for increased transparency to create a fair market.
Only those who against would have something to hide.
I appreciate the additional consideration and opportunity extended by
SR-OCC-2024-001 Release No 34-100009
\[[1](https://www.sec.gov/files/rules/sro/occ/2024/34-100009.pdf)\] to
comment on 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”
([PDF](https://www.sec.gov/files/rules/sro/occ/2024/34-99393.pdf),
[Federal
Register](https://www.federalregister.gov/documents/2024/01/25/2024-01386/self-regulatory-organizations-the-options-clearing-corporation-notice-of-filing-of-proposed-rule))
\[2\].
The details of this proposal in [Exhibit
5](https://www.sec.gov/files/rules/sro/occ/2024/34-99393-ex5.pdf)
along with supporting information (see, e.g., [Exhibit
3](https://www.sec.gov/files/rules/sro/occ/2024/34-99393-ex3.pdf)) are
significantly redacted which prevents public review making it
impossible for the public to meaningfully review and comment on this
proposal. Without opportunity for a full public review, this proposal
should be rejected on that basis alone.
Public review is of the particular importance as the OCC’s Proposed
Rule blames U.S. regulators for failing to require the OCC adopt
prescriptive procyclicality controls (“U.S. regulators chose not to
adopt the typ??es of prescriptive procyclicality controls codified
by financial regulators in other jurisdictions.”
\[[3](https://www.federalregister.gov/d/2024-01386/p-11)\]). As
“??procyclicality may be evidenced by increasing margin in times
of stressed market conditions”
\[[4](https://www.federalregister.gov/d/2024-01386/p-8)\], an
“increase in margin requirements could stress a Clearing
Member's ability to obtain liquidity to meet its obligations to
OCC” \[[Id.](https://www.federalregister.gov/d/2024-01386/p-8)\]
which “could expose OCC to financial risks if a Clearing Member
fails to fulfil its obligations”
\[[5](https://www.federalregister.gov/d/2024-01386/p-7)\] that
“could threaten the stability of its members during periods of
heightened volatility”
\[[4](https://www.federalregister.gov/d/2024-01386/p-8)\]. With the
OCC designated as a
[SIFMU](https://en.wikipedia.org/wiki/Systemically_important_financial_market_utility)
whose failure or disruption could threaten the stability of the US
financial system, everyone dependent on the US financial system is
entitled to transparency. As the OCC is classified as a
self-regulatory organization (SRO), the OCC blaming U.S. regulators
for not requiring the SRO adopt regulations to protect itself makes it
apparent that the public can not fully rely upon the SRO and/or the
U.S. regulators to safeguard our financial markets.
This particular OCC rule proposal appears designed to protect Clearing
Members from realizing the risk of potentially costly trades by rubber
stamping reductions in margin requirements as required by Clearing
Members; which would increase risks to the OCC and the stability of
our financial system. Per the OCC rule proposal:
* The OCC collects margin collateral from Clearing Members to address
the market risk associated with a Clearing Member’s positions.
\[[5](https://www.federalregister.gov/d/2024-01386/p-7)\]
* OCC uses a proprietary system, STANS (“System for Theoretical
Analysis and Numerical Simulation”), to calculate each Clearing
Member's margin requirements with various models. One of the
margin models may produce “procyclical” results where margin
requirements are correlated with volatility which “could threaten
the stability of its members during periods of heightened
volatility”.
\[[4](https://www.federalregister.gov/d/2024-01386/p-8)\]
* An increase in margin requirements could make it difficult for a
Clearing Member to obtain liquidity to meet its obligations to OCC. If
the Clearing Member defaults, liquidating the Clearing Member
positions could result in losses chargeable to the Clearing Fund which
could create liquidity issues for non-defaulting Clearing Members.
\[[4](https://www.federalregister.gov/d/2024-01386/p-8)\]
Basically, a systemic risk exists because Clearing Members as a whole
are insufficiently capitalized and/or over-leveraged such that a
single Clearing Member failure (e.g., from insufficiently managing
risks arising from high volatility) could cause a cascade of Clearing
Member failures. In layman’s terms, a Clearing Member who made bad
bets on Wall St could trigger a systemic financial crisis because
Clearing Members as a whole are all risking more than they can afford
to lose.
The OCC’s rule proposal attempts to avoid triggering a systemic
financial crisis by reducing margin requirements using
“idiosyncratic” and “global” control settings; highlighting
one instance for one individual risk factor that “\[a\]fter
implementing idiosyncratic control settings for that risk factor,
aggregate margin requirements decreased $2.6 billion.”
\[[6](https://www.federalregister.gov/d/2024-01386/p-50)\] The OCC
chose to avoid margin calling one or more Clearing Members at risk of
default by implementing “idiosyncratic” control settings for a
risk factor. According to [footnote
35](https://www.federalregister.gov/d/2024-01386/p-51)
\[[7](https://www.federalregister.gov/d/2024-01386/p-51)\], the OCC
has made this “idiosyncratic” choice over 200 times in less than 4
years (from December 2019 to August 2023) of varying durations up to
190 days (with a median duration of 10 days). The OCC is choosing to
waive away margin calls for Clearing Members over 50 times a year;
which seems too often to be idiosyncratic. In addition to waiving away
margin calls for 50 idiosyncratic risks a year, the OCC has also
chosen to implement “global” control settings in connection with
[long
tail](https://en.wikipedia.org/wiki/Long_tail)\[[8](https://en.wikipedia.org/wiki/Long_tail)\]
events including the onset of the COVID-19 pandemic and the so-called
“meme-stock” episode on January 27, 2021.
\[[9](https://www.federalregister.gov/d/2024-01386/p-45)\]
Fundamentally, these rules create an unfair marketplace for other
market participants, including retail investors, who are forced to
face the consequences of long-tail risks while the OCC repeatedly
waives margin calls for Clearing Members by repeatedly reducing their
margin requirements. For this reason, this rule proposal should be
rejected and Clearing Members should be subject to strictly defined
margin requirements as other investors are. SEC approval of this
proposed rule would perpetuate “rules for thee, but not for me” in
our financial system against the SEC’s mission of maintaining fair
markets.
Per the OCC, this rule proposal and these special margin reduction
procedures exist because a single Clearing Member defaulting could
result in a cascade of Clearing Member defaults potentially exposing
the OCC to financial risk.
\[[10](https://www.federalregister.gov/d/2024-01386/p-79)\] Thus,
Clearing Members who fail to properly manage their portfolio risk
against long tail events become de facto Too Big To Fail. For this
reason, this rule proposal should be rejected and Clearing Members
should face the consequences of failing to properly manage their
portfolio risk, including against long tail events. Clearing Member
failure is a natural disincentive against excessive leverage and
insufficient capitalization as others in the market will not cover
their loss.
This rule proposal codifies an inherent conflict of interest for the
Financial Risk Management (FRM) Officer. While the FRM Officer’s
position is allegedly to protect OCC’s interests, the situation
outlined by the OCC proposal where a Clearing Member failure exposes
the OCC to financial risk necessarily requires the FRM Officer to
protect the Clearing Member from failure to protect the OCC. Thus, the
FRM Officer is no more than an administrative rubber stamp to reduce
margin requirements for Clearing Members at risk of failure. The OCC
proposal supports this interpretation as it clearly states, “\[i\]n
practice, FRM applies the high volatility control set to a risk factor
each time the Idiosyncratic Thresholds are breached”
\[[22](https://www.federalregister.gov/d/2024-01386/p-74)\] retaining
the authority “to maintain regular control settings in the case of
exceptional circumstances” \[Id.\]. Unfortunately, rubber stamping
margin requirement reductions for Clearing Members at risk of failure
vitiates the protection from market risks associated with Clearing
Member’s positions provided by the margin collateral that would have
been collected by the OCC. For this reason, this rule proposal should
be rejected and the OCC should enforce sufficient margin requirements
to protect the OCC and minimize the size of any bailouts that may
already be required.
As the [OCC’s Clearing Member Default Rules and
Procedures](https://protect2.fireeye.com/v1/url?k=31323334-50bba2bf-3132d782-4544474f5631-8eaacaa8d5ebe586&q=1&e=209d3b96-ef09-4ee4-83d2-5caccc64a436&u=https%3A%2F%2Fwww.theocc.com%2Fgetmedia%2Fe8792e3c-8802-4f5d-bef2-ada408ed1d96%2Fdefault-rules-and-procedures.pdf;)
\[[11](https://protect2.fireeye.com/v1/url?k=31323334-50bba2bf-3132d782-4544474f5631-04742ea0f96f47a3&q=1&e=209d3b96-ef09-4ee4-83d2-5caccc64a436&u=https%3A%2F%2Fwww.theocc.com%2Fgetmedia%2Fe8792e3c-8802-4f5d-bef2-ada408ed1d96%2Fdefault-rules-and-procedures.pdf%3B%29%2F]
Loss Allocation waterfall allocates losses to “?3. OCC’s own
pre-funded financial resources” ([OCC ‘s “skin-in-the-game”
per SR-OCC-2021-801 Release
34-91491](https://www.federalregister.gov/documents/2021/04/12/2021-07454/self-regulatory-organizations-the-options-clearing-corporation-notice-of-no-objection-to-advance)\[[12](https://www.federalregister.gov/documents/2021/04/12/2021-07454/self-regulatory-organizations-the-options-clearing-corporation-notice-of-no-objection-to-advance)\])
before “4. Clearing fund deposits of non-defaulting firms”, any
sufficiently large Clearing Member default which exhausts both “1.
The margin deposits of the suspended firm” and “2. Clearing fund
deposits of the suspended firm” automatically poses a financial risk
to the OCC. As this rule proposal is concerned with potential
liquidity issues for non-defaulting Clearing Members as a result of
charges to the Clearing Fund, it is clear that the OCC is concerned
about risk which exhausts OCC’s own pre-funded financial resources.
With the first and foremost line of protection for the OCC being “1..
The margin deposits of the suspended firm”, this rule proposal to
reduce margin requirements for at risk Clearing Members via
idiosyncratic control settings is blatantly illogical and nonsensical.
By the OCC’s own admissions regarding the potential scale of
financial risk posed by a defaulting Clearing Member, the OCC should
be increasing the amount of margin collateral required from the at
risk Clearing Member(s) to increase their protection from market risks
associated with Clearing Member’s positions and promote appropriate
risk management of Clearing Member positions. Curiously, increasing
margin requirements is exactly what the OCC admits is predicted by the
allegedly “procyclical” STANS model
\[[4](https://www.federalregister.gov/d/2024-01386/p-8)\] that the OCC
alleges is an overestimation and seeks to mitigate
\[[13](https://www.federalregister.gov/d/2024-01386/p-16)\]. If this
rule proposal is approved, mitigating the allegedly procyclical margin
requirements directly reduces the first line of protection for the
OCC, margin collateral from at risk Clearing Member(s), so this rule
proposal should be rejected and made fully available for public
review.
Strangely, the OCC proposed the rule change to establish their Minimum
Corporate Contribution (OCC’s “skin-in-the-game”) in
SR-OCC-2021-003 to the SEC on February 10, 2021
\[[14](https://www.federalregister.gov/documents/2021/06/03/2021-11606/self-regulatory-organizations-the-options-clearing-corporation-order-approving-proposed-rule-change#p-1)\],
shortly after “the so-called ‘meme-stock’ episode on January 27,
2021” \[[9](https://www.federalregister.gov/d/2024-01386/p-45)\],
whereby “a covered clearing agency choosing, upon the occurrence of
a default or series of defaults and application of all available
assets of the defaulting participant(s), to apply its own capital
contribution to the relevant clearing or guaranty fund in full to
satisfy any remaining losses prior to the application of any (a)
contributions by non-defaulting members to the clearing or guaranty
fund, or (b) assessments that the covered clearing agency require
non-defaulting participants to contribute following the exhaustion of
such participant's funded contributions to the relevant clearing
or guaranty fund.”
\[[15](https://www.federalregister.gov/d/2021-11606/p-9)\] Shortly
after an idiosyncratic market event, the OCC proposed the rule change
to have the OCC’s “skin-in-the-game” allocate losses upon one or
more Clearing member default(s) to the OCC’s own pre-funded
financial resources prior to contributions by non-defaulting members
or assessments, and the OCC now attempts to leverage their requested
exposure to the financial risks as rationale for approving this
proposed rule change on adjusting margin requirement calculations
which vitiates existing protections as described above and within the
proposal itself (see, e.g., “These clearing activities could expose
OCC to financial risks if a Clearing Member fails to fulfil its
obligations to OCC. … OCC manages these financial risks through
financial safeguards, including the collection of margin collateral
from Clearing Members designed to, among other things, address the
market risk associated with a Clearing Member's positions during
the period of time OCC has determined it would take to liquidate those
positions.”
\[[16](https://www.federalregister.gov/d/2024-01386/p-7)\]) There can
be no reasonable basis for approving this rule proposal as the OCC
asked to be exposed to financial risks if one or more Clearing
Member(s) fail and is now asking to reduce the financial safeguards
(i.e., collection of margin collateral from Clearing Members) for
managing those financial risks. Especially when the OCC has already
indicated a reluctance to liquidate Clearing Member positions (see,
e.g., “As described above, the proposed change would allow OCC to
seek a readily available liquidity resource that would enable it to,
among other things, continue to meet its obligations in a timely
fashion and as an alternative to selling Clearing Member collateral
under what may be stressed and volatile market conditions.” \[23 at
page 15\])
Moreover, as “the sole clearing agency for standardized equity
options listed on national securities exchanges registered with the
Commission”
\[[16](https://www.federalregister.gov/d/2024-01386/p-7)\] the OCC
appears to also be leveraging their position as a “single point of
failure”
\[[17](https://en.wikipedia.org/wiki/Single_point_of_failure)\] in our
financial system in a blatant attempt to force the SEC to approve this
proposed rule “to mitigate systemic risk in the financial system and
promote financial stability by … strengthening the liquidity of
SIFMUs”, again \[18\]. It seems the one and only clearing agency for
standardized equity options is essentially holding options clearing in
our financial system hostage to gain additional liquidity; and did so
by putting itself at risk. Does the SIFMU designation identify a part
of our financial system Too Big To Fail where our regulatory agencies
and government willingly provide liquidity by any means necessary?
Even if intentionally self-inflicted?
Apparently affirmative; if the recent examples of SR-OCC-2022-802 and
SR-OCC-2022-803, which expand the OCC’s Non-Bank Liquidity Facility
(specifically including pension funds and insurance companies) to
provide the OCC uncapped access to liquidity therein \[19\], are
indicative and illustrative where the SEC did not object despite
numerous comments objecting \[20\].
If the SEC either allows or does not object to this proposal, then the
SEC effectively demonstrates a willingness to provide liquidity by any
means possible \[[21](https://www.youtube.com/watch?v=nc-EAHaHeks)\].
The combination of this current OCC proposal with SR-OCC-2022-802 and
SR-OCC-2022-803 facilitates an immense uncapped reallocation of
liquidity from the OCC’s Non-Bank Liquidity Facility to the OCC;
under the control of the OCC.
* While the FRM Officer is an administrative rubber stamp for
approving margin reductions as described above, the OCC’s FRM
Officer retains authority “to maintain regular control settings in
the case of exceptional circumstances”
\[[22](https://www.federalregister.gov/d/2024-01386/p-74)\]. In
effect, under undisclosed or redacted exceptional circumstances, the
OCC’s FRM Officer has the authority to *not* rubber stamp a margin
reduction thereby resulting in a margin call for a Clearing Member;
which may lead to a potential default or suspension of the Clearing
Member unable to meet their obligations to the OCC.
* With control over when a Clearing Member will not receive a rubber
stamp margin reduction, the OCC can preemptively activate Master
Repurchase Agreements (enhanced by SR-OCC-2022-802) to force Non-Bank
Liquidity Facility Participants (including pension funds and insurance
companies) to purchase Clearing Member collateral from the OCC under
the Master Repurchase Agreements in advance of a significant Clearing
Member default “as an alternative to selling Clearing Member
collateral under what may be stressed and volatile market
conditions” \[23 at 15\] (i.e., conditions that may arise with a
significant Clearing Member default large enough to pose a financial
risk to the OCC and other Clearing Members).
* The OCC’s Master Repurchase Agreements further allows the OCC to
repurchase the collateral on-demand \[23 at pages 5 and 24 at pages
5-6\] which allows the OCC to repurchase collateral during the
stressed and volatile market conditions arising from the Clearing
Member default; almost certainly at a discount.
In effect, the combination of SR-OCC-2022-802, SR-OCC-2022-803, and
this proposal allows the OCC to perfectly time selling collateral at a
high price to non-banks (including pension funds and insurance
companies) followed by buying back low after a Clearing Member
default. These rules should not be codified *even if* “non-banks are
voluntarily participating in the facility” \[24 at page 19\] as
there are potentially significant consequences to others. For example,
pensions and retirements may be affected even if a pension fund
voluntarily participates. And, as another example, insurance companies
may become insolvent requiring another bailout à la the 2008
financial crisis and AIG bailout.
As the OCC is concerned about the consequences of a Clearing Member
failure exposing the OCC to financial risk and causing liquidity
issues for non-defaulting Clearing Members, the previously relied upon
rationale for mitigating systemic risk is simply inappropriate.
Systemic risk has already been significant; embiggened by a lack of
regulatory enforcement and insufficient risk management (including the
repeated margin requirement reductions for at-risk Clearing Members).
Instead of running larger tabs that can never be paid off, bills need
to be paid by those who incurred debts (instead of by pensions,
insurance companies, and/or the public) before the debts are of
systemic significance.
**Therefore, the SEC is correct to have identified reasonable grounds
for disapproval** as this Proposed Rule Change is NOT consistent with
at least Section 17A(b)(3)(F), Rule 17Ad-22(e)(2), and Rule
17Ad-22(e)(6) of the Exchange Act (15 U.S.C. 78s(b)(2)).
The SEC is correct to have identified reasonable grounds for
disapproval of this Proposed Rule Change with respect to Section
17A(b)(3)(F) for at least the following reasons:
(1) the Proposed Rule fails to safeguard the securities and funds
which are in the custody or control of the clearing agency or for
which it is responsible by improperly reducing margin requirements for
Clearing Members at risk of default which exposes the OCC and other
market participants to increased financial risk, as described above;
and
(2) the Proposed Rule fails to protect investors and the public
interest by shifting the costs of Clearing Member default(s) to the
non-bank liquidity facility (including pension funds and insurance
companies) and creates a moral hazard in expanding the scope of Too
Big To Fail to any Clearing Member incurring losses beyond their
margin deposits and clearing fund deposits, as described above.
The SEC is correct to have identified reasonable grounds for
disapproval of this Proposed Rule Change with respect to Rule
17Ad-22(e)(2) for at least the following reasons:
(1) the Proposed Rule does not provide a governance arrangement that
is clear and transparent as (a) the FRM Officer's role
prioritizes the safety of Clearing Members rather than the clearing
agency and (b) the repeated application of "idiosyncratic"
and "global" control settings to reduce margin requirements
is not clear and transparent, as described above;
(2) the Proposed Rule does not prioritize the safety of the clearing
agency, but instead prioritizes the safety of Clearing Members by
rubber stamping margin requirement reductions, as described above;
(3) the Proposed Rule does not support the public interest
requirements, especially the requirement to protect of investors, by
shifting the costs of Clearing Member default(s) to the non-bank
liquidity facility (including pension funds and insurance companies),
as described above;
(4) the Proposed Rule does not specify clear and direct lines of
responsibility as, for example, the FRM Officer's role is to be
an administrative rubber stamp to reduce margin requirements for
Clearing Members at risk of failure, as described above; and
(5) the Proposed Rule does not consider the interests of customers and
securities holders as (a) reducing margin requirements for Clearing
Member(s) at risk of default increases already significant systemic
risk which necessarily impacts all market participants and (b)
perpetuates a "rules for thee, but not for me" environment
in our financial system, as described above.
The SEC is correct to have identified reasonable grounds for
disapproval of this Proposed Rule Change with respect to Rule
17Ad-22(e)(6) for at least the following reasons:
(1) the Proposed Rule fails to consider and produce margin levels
commensurate with risks as reducing margin for Clearing Member(s) at
risk of default is blatantly illogical and nonsensical, as described
above;
(2) the Proposed Rule fails to calculate margin sufficient to cover
potential future exposure as margin requirements are already
insufficient as Clearing Member default(s) could result in
"losses chargeable to the Clearing Fund which could create
liquidity issues for non-defaulting Clearing Members" yet
proposing to further reduce margin requirements, as described above;
(3) the Proposed Rule fails to provide a valid model for the margin
system attempting to reduce margin requirements despite existing
models predicting increased margin requirements are required while
also admitting the potential scale of financial risk posed by a
defaulting Clearing Member exceeds the current margin requirements
such that losses will be allocated beyond suspended firm(s) to the OCC
and non-defaulting members, as described above;
In addition, the SEC may consider Rule 17Ad-22(e)(3), 17Ad-22(e)(4),
and 17Ad-22(e)(6) as an additional grounds for disapproval as the
Proposed Rule Change does not properly manage liquidity risk and
increases systemic risk, as described above. Other grounds for
disapproval may be applicable, but due to the heavy redactions, the
public is unable to properly and fully review the Proposed Rule.
In light of the issues outlined above, please consider the following:
1. Increase and enforce margin requirements commensurate with risks
associated with Clearing Member positions instead of reducing margin
requirements. Clearing Members should be encouraged to position their
portfolios to account for stressed market conditions and long-tail
risks. This rule proposal currently encourages Clearing Members to
become Too Big To Fail in order to pressure the OCC with excessive
risk and leverage into implementing idiosyncratic controls more often
to privatize profits and socialize losses.
2. External auditing and supervision as a “fourth line of defense”
similar to that described in [The “four lines of defence model”
for financial institutions](https://www.bis.org/fsi/fsipapers11.pdf)
\[[25](https://www.bis.org/fsi/fsipapers11.pdf)\] with enhanced public
reporting to ensure that risks are identified and managed before they
become systemically significant.
3. Swap “?3. OCC’s own pre-funded financial resources” and
“4. Clearing fund deposits of non-defaulting firms” for the
OCC’s Loss Allocation waterfall so that Clearing fund deposits of
non-defaulting firms are allocated losses before OCC’s own
pre-funded financial resources and the EDCP Unvested Balance. Changing
the order of loss allocation would encourage Clearing Members to
police each other with each Clearing Member ensuring other Clearing
Members take appropriate risk management measures as their Clearing
Fund deposits are at risk after the deposits of a suspended firm are
exhausted. This would also increase protection to the OCC, a SIFMU, by
allocating losses to the clearing corporation after Clearing Member
deposits are exhausted. By extension, the public would benefit from
lessening the risk of needing to bail out a systemically important
clearing agency as non-defaulting Clearing Members would benefit from
the suspension and liquidation of a defaulting Clearing Member prior
to a risk of loss allocation to their contributions.
4. Immediately suspend and liquidate a Clearing Member as soon as
their losses are projected to exceed “1. The margin deposits of the
suspended firm” so that the additional resources in the loss
allocation waterfall may be reserved for extraordinary circumstances.
By contrast to the past approaches for reducing margin requirements
which delays Clearing Member suspension and liquidation, earlier
interventions minimize systemic risk by preventing problems from
growing bigger and threatening the stability of the financial system.
5. Reduce “single points of failure” in our financial system by
increasing redundancy (e.g., multiple Clearing Agencies in
competition) and resiliency of our financial markets. TBTF must be
eliminated. Failure must always be an option.
Thank you for the opportunity to comment for the protection of all
investors as all investors benefit from a fair, transparent, and
resilient market.
\[1\]
[https://www.sec.gov/files/rules/sro/occ/2024/34-100009.pdf](https://www.sec.gov/files/rules/sro/occ/2024/34-100009.pdf)
\[2\] [PDF](https://www.sec.gov/files/rules/sro/occ/2024/34-99393.pdf)
at
[https://www.sec.gov/files/rules/sro/occ/2024/34-99393.pdf](https://www.sec..gov/files/rules/sro/occ/2024/34-99393.pdf)
and on the [Federal
Register](https://www.federalregister.gov/documents/2024/01/25/2024-01386/self-regulatory-organizations-the-options-clearing-corporation-notice-of-filing-of-proposed-rule)
at
[https://www.federalregister.gov/documents/2024/01/25/2024-01386/self-regulatory-organizations-the-options-clearing-corporation-notice-of-filing-of-proposed-rule](https://www.federalregister.gov/documents/2024/01/25/2024-01386/self-regulatory-organizations-the-options-clearing-corporation-notice-of-filing-of-proposed-rule)
\[3\]
[https://www.federalregister.gov/d/2024-01386/p-11](https://www.federalregister.gov/d/2024-01386/p-11)
\[4\]
[https://www.federalregister.gov/d/2024-01386/p-8](https://www.federalregister.gov/d/2024-01386/p-8)
\[5\]
[https://www.federalregister.gov/d/2024-01386/p-7](https://www.federalregister.gov/d/2024-01386/p-7)
\[6\]
[https://www.federalregister.gov/d/2024-01386/p-50](https://www.federalregister.gov/d/2024-01386/p-50)
\[7\]
[https://www.federalregister.gov/d/2024-01386/p-51](https://www.federalregister.gov/d/2024-01386/p-51)
\[8\]
[https://en.wikipedia.org/wiki/Long\_tail](https://en.wikipedia.org/wiki/Long_tail)
\[9\]
[https://www.federalregister.gov/d/2024-01386/p-45](https://www.federalregister.gov/d/2024-01386/p-45)
\[10\]
[https://www.federalregister.gov/d/2024-01386/p-79](https://www.federalregister.gov/d/2024-01386/p-79)
\[11\]
[https://protect2.fireeye.com/v1/url?k=31323334-50bba2bf-3132d782-4544474f5631-8ad2de522dc3e6ff&q=1&e=209d3b96-ef09-4ee4-83d2-5caccc64a436&u=https%3A%2F%2Fwww.theocc.com%2Fgetmedia%2Fe8792e3c-8802-4f5d-bef2-ada408ed1d96%2Fdefault-rules-and-procedures.pdf%5D%28https%3A%2F%2Fwww.theocc.com%2Fgetmedia%2Fe8792e3c-8802-4f5d-bef2-ada408ed1d96%2Fdefault-rules-and-procedures.pdf),
which is publicly available and linked to from the OCC’s web page on
Default Rules & Procedures at
[https://protect2.fireeye.com/v1/url?k=31323334-50bba2bf-3132d782-4544474f5631-fc5731503808199d&q=1&e=209d3b96-ef09-4ee4-83d2-5caccc64a436&u=https%3A%2F%2Fwww.theocc.com%2Frisk-management%2Fdefault-rules-and-procedures%5D%28https%3A%2F%2Fwww.theocc.com%2Frisk-management%2Fdefault-rules-and-procedures)
\[12\]
[https://www.federalregister.gov/documents/2021/04/12/2021-07454/self-regulatory-organizations-the-options-clearing-corporation-notice-of-no-objection-to-advance](https://www.federalregister.gov/documents/2021/04/12/2021-07454/self-regulatory-organizations-the-options-clearing-corporation-notice-of-no-objection-to-advance)
\[13\]
[https://www.federalregister.gov/d/2024-01386/p-16](https://www.federalregister.gov/d/2024-01386/p-16)
\[14\]
[https://www.federalregister.gov/d/2021-11606/p-1](https://www.federalregister.gov/d/2021-11606/p-1)
\[15\]
[https://www.federalregister.gov/d/2021-11606/p-9](https://www.federalregister.gov/d/2021-11606/p-9)
\[16\]
[https://www.federalregister.gov/d/2024-01386/p-7](https://www.federalregister.gov/d/2024-01386/p-7)
\[17\]
[https://en.wikipedia.org/wiki/Single\_point\_of\_failure](https://en.wikipedia.org/wiki/Single_point_of_failure)
\[18\] See, e.g., SR-OCC-2022-803 Release No. 34-95670
\[[https://www.sec.gov/files/rules/sro/occ-an/2022/34-95670.pdf](https://www.sec.gov/files/rules/sro/occ-an/2022/34-95670.pdf)\]
and SR-OCC-2022-802 Release No. 34-95669
\[[https://www.sec.gov/files/litigation/litreleases/2022/34-95669.pdf](https://www.sec.gov/files/litigation/litreleases/2022/34-95669.pdf)\]
under the section “COMMISSION FINDINGS AND NOTICE OF NO OBJECTION”
in each.
\[19\] See, e.g., SR-OCC-2022-803 Release No. 34-95670
\[[https://www.sec.gov/files/rules/sro/occ-an/2022/34-95670.pdf](https://www.sec.gov/files/rules/sro/occ-an/2022/34-95670.pdf)\]
and SR-OCC-2022-802 Release No. 34-95669
\[[https://www.sec.gov/files/litigation/litreleases/2022/34-95669.pdf](https://www.sec.gov/files/litigation/litreleases/2022/34-95669.pdf)\].
\[20\] See
[https://www.sec.gov/comments/sr-occ-2022-802/srocc2022802.htm](https://www.sec.gov/comments/sr-occ-2022-802/srocc2022802.htm)
for SR-OCC-2022-802 and
[https://www.sec.gov/comments/sr-occ-2022-803/srocc2022803.htm](https://www..sec.gov/comments/sr-occ-2022-803/srocc2022803.htm)
for SR-OCC-2022-803.
\[21\] For context, see e.g.,
[https://www.youtube.com/watch?v=nc-EAHaHeks](https://www.youtube.com/watch?v=nc-EAHaHeks)
and
[https://www.newsweek.com/robin-williams-2008-financial-crisis-economy-comedy-1797289](https://www.newsweek.com/robin-williams-2008-financial-crisis-economy-comedy-1797289).
\[22\]
[https://www.federalregister.gov/d/2024-01386/p-74](https://www.federalregister.gov/d/2024-01386/p-74)
\[23\] SR-OCC-2022-802 34-95327 available at
[https://www.sec.gov/files/litigation/litreleases/2022/34-95327.pdf](https://www.sec.gov/files/litigation/litreleases/2022/34-95327.pdf)
\[24\] SR-OCC-2022-803 34-95670 available at
[https://www.sec.gov/files/litigation/litreleases/2022/34-95670.pdf](https://www.sec.gov/files/litigation/litreleases/2022/34-95670.pdf)
\[25\]
[https://www.bis.org/fsi/fsipapers11.pdf](https://www.bis.org/fsi/fsipapers11.pdf)
Sincerely,
A Concerned Retail Investor,
Jonathan Cabrera",
"commenterInfo": {
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"rulePath": "/comments/sr-occ-2024-001",
"title": "Notice of Filing of Proposed Rule Change by The Options
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Parameters in Its Proprietary System for Calculating Margin
Requirements During Periods When the Products It Clears and the
Markets It Serves Experience High Volatility "
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"commentDate": "May 04, 2024",
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