May 9, 2024
To whom it may concern, I oppose the proposal as written. It is a giant word salad that is a blatant attempt to avoid a simple truth. Clearing agencies and SRO's seem to be admitting that their members are taking on huge risks, they are doing very little to mitigate such risks, and they want to have permission to selectively ignore those risks anytime they have a clear and present danger to have actual consequences. Because those same risks seem to threaten the existence of entire markets, their solution is to make waivers to allow bad bets to continue. Let's look back to the last financial crisis - how many homeowners who were underwater and failed to make payments were allowed to stay in their homes? If banks had made waivers for "idiosyncratic risk" on mortgage payments, would that have saved the system without government intervention? Not with squatter's rights as we now know them. Back to the present reality, we have a multitude of intertwined banks & investment firms, broker/dealers, market makers, and other bodies hawking "innovative financial products," which rely on complicated derivatives, swaps, and boundaries between regulatory agencies. These all existed in the last financial crisis as well, and were quite possibly if not likely more responsible for the last crisis. I would have never pictured myself saying this, but maybe the Nevada Gaming Commission is better prepared to regulate our financial markets. The proposed rule is like saying "well, if something looks like it's going to bring down the house and potentially all of Vegas, just selectively ignore the bet." I doubt even NGC would rubber stamp that. I know SEC is getting better at listening to household investors who are bringing forth common-sense comments to rule proposals, and I applaud the staff who are doing so. Once again, I oppose the proposal as written. Please send it back to OCC and have them come up with something better for our markets. If you can't, that's fine. My next letters are to my congressional representatives to ask them to rethink the entire framework and purpose of SRO's, and whether they should be authorized in their current form. Aaron Heiss