May 10, 2024
Dear Esteemed Members of the Securities and Exchange Commission, I am writing with a pressing concern regarding the Proposed Rule Change SR-OCC-2024-001 34-99393, put forth by The Options Clearing Corporation (OCC), and I implore the SEC to dismiss it outright. As an investor deeply vested in the fairness and integrity of our financial markets, I find several compelling reasons to advocate against the approval of this proposal. First and foremost, transparency is non-negotiable in matters concerning our financial system. Unfortunately, the current proposal falls short in this regard, with critical details obscured behind significant redactions. Without full disclosure, the public's ability to provide meaningful feedback is compromised, undercutting the very foundation of trust upon which our markets rely. Equally troubling is the attempt by the OCC to shift accountability onto U.S. regulators for what it portrays as deficiencies in oversight. Such deflection not only erodes confidence in the OCC's own governance but also undermines the regulatory framework meant to safeguard our financial stability. In an environment where market volatility can have far-reaching consequences, transparency and accountability are paramount. The proposed rule change appears tailor-made to insulate Clearing Members from the repercussions of risky behavior by systematically reducing margin requirements. This not only heightens the risks borne by the OCC and the wider financial ecosystem but also creates an uneven playing field that disadvantages other market participants, including retail investors. Such preferential treatment is antithetical to the SEC's mandate of ensuring fair and equitable markets. Moreover, by effectively designating Clearing Members as "Too Big To Fail," the proposal exacerbates systemic risk. By shielding them from the full consequences of their actions, it incentivizes irresponsible risk-taking and poses a grave threat to market stability. The purported rationale for margin reduction, under the guise of mitigating systemic risk, fails to address the fundamental flaws in risk management practices. Of equal concern is the inherent conflict of interest within the proposed rule, particularly regarding the role of the Financial Risk Management (FRM) Officer. Prioritizing Clearing Members' interests over the broader safety and integrity of the clearing agency undermines effective risk management and compromises market resilience. Any rule change that compromises investor protection and promotes undue risk-taking should be summarily rejected. In conclusion, the Proposed Rule Change SR-OCC-2024-001 34-99393 falls short of the transparency, accountability, and fairness required to uphold the integrity of our financial markets. I urge the SEC to reject this proposal and uphold its commitment to protecting investors and preserving market integrity. Thank you for your attention to this urgent matter. Yours sincerely, Greg