May 8, 2024
Hello! Thank you for the chance provided by SR-OCC-2024-001 Release No. 34-99594 to share my thoughts on the proposed changes to the Options Clearing Corporation's (OCC) margin calculation methods during volatile market conditions. I do not support this proposal and believe it should be rejected for several reasons, including a lack of transparency that hinders public review. The proposal lacks clarity, as significant parts are redacted, making it difficult for the public to provide meaningful feedback. This lack of transparency is concerning, especially as the proposal mentions that U.S. regulators have not mandated certain market stability measures that are standard in other jurisdictions. The proposed rule seems designed to reduce margin requirements in ways that might protect certain members at the expense of overall market stability. This approach could potentially increase financial risks during periods of high volatility, which is contrary to the need for robust financial safeguards. The rule also appears to frequently waive margin calls, which could destabilize the financial system. The OCC's use of "idiosyncratic" and "global" settings to avoid triggering margin calls reflects a problematic approach to managing systemic risks. It's concerning that such adjustments have been made frequently, suggesting a pattern that might undermine the intended protective mechanisms of margin requirements. Overall, the rule proposal prioritizes the interests of certain financial players over the broader market, creating potential conflicts of interest and undermining the principles of fair and stable financial markets. Therefore, I believe the proposal should be amended or rejected to ensure it aligns with the goal of protecting all market participants and maintaining market integrity. Thank you for the opportunity to express my concerns and contribute to the rulemaking process. It is crucial that all investors are protected in a fair, orderly, and efficient market. Thank you, Thomas