May 12, 2024
Securities and Exchange Commission Chairman, Securities and Exchange Commission 100 F Street NE Washington, DC 20549 Dear Chair Gary Gensler, I am writing to express my full support for the recent decision by the Securities and Exchange Commission (SEC) to reject the proposed rule change by the Office of the Comptroller of the Currency (OCC). The SEC's commitment to upholding transparency, risk mitigation, and investor protection in the financial markets is commendable, and their decision reflects a prudent approach to safeguarding the integrity of our financial system. Transparency is the cornerstone of a fair and efficient financial market. The lack of transparency in the OCC's proposed rule change is deeply concerning, as it undermines the ability of investors to make informed decisions and exposes them to unnecessary risks. By rejecting the proposal, the SEC has demonstrated its dedication to maintaining transparency standards that are essential for fostering trust and confidence among market participants. Moreover, the potential systemic risks posed by the proposed margin requirement adjustments during market volatility cannot be overstated. Such adjustments have the potential to amplify market fluctuations and exacerbate systemic vulnerabilities, leading to destabilizing effects on the financial system as a whole. The SEC's decision to prioritize risk mitigation underscores its commitment to preserving the stability and resilience of our financial markets, particularly during periods of heightened uncertainty. Additionally, the conflict of interest inherent in the role of the FRM Officer raises significant ethical concerns. Allowing the FRM Officer to simultaneously serve as a member of the risk committee creates a clear conflict of interest, compromising the independence and objectivity necessary for effective risk management oversight. By rejecting the proposed rule change, the SEC has upheld the principle of accountability and integrity in governance, thereby enhancing investor confidence and market integrity. History has shown us that market participants have a tendency of overleveraging themselves without exercising appropriate risk management. Whenever banks and nonbanks are on the wrong side of a trade, they seek to find loopholes to escape their bad decision-making. The OCC’s proposed rule change will only exacerbate the status quo. Margin calls are compulsory in assuring that all market participants are held responsible. Retail has long been at a disadvantage, so I respectfully urge the SEC to reject this irrelevant proposal implemented by the OCC. In conclusion, I wholeheartedly support the SEC's decision to reject the OCC's proposed rule change. By prioritizing transparency, risk mitigation, and investor protection, the SEC has demonstrated its unwavering commitment to maintaining a fair, orderly, and efficient financial market. I commend the SEC for its diligence and foresight in safeguarding the interests of investors and preserving the integrity of our financial system. Your time and effort are appreciated. Sincerely, Hassan Beydoun