May 13, 2024
Alex Chairman, Securities and Exchange Commission 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). This decision underscores the crucial importance of transparency, risk mitigation, and investor protection in upholding the integrity of our financial markets. The proposed rule change by the OCC raised significant concerns regarding its lack of transparency. Transparency is the cornerstone of a fair and efficient financial market. Investors rely on clear and accessible information to make informed decisions. However, the OCC's proposal lacked clarity on several key aspects, including the methodology for setting margin requirements and the potential impact on market participants. Without transparency, market participants are left in the dark, increasing the likelihood of market disruptions and unfair practices. Furthermore, the proposed rule change failed to adequately address the potential systemic risks associated with margin requirement adjustments, particularly during periods of market volatility. Margin requirements play a crucial role in mitigating risk and maintaining market stability. However, the proposed changes lacked sufficient safeguards to prevent excessive leverage and speculative behavior, which could amplify market downturns and pose systemic risks to the broader financial system. Rejecting the proposal is a prudent measure to safeguard against such risks and preserve market integrity. Additionally, the conflict of interest inherent in the role of the Financial Risk Management (FRM) Officer raised serious concerns about the proposal's impartiality and independence. The FRM Officer's dual responsibilities to both assess risk and manage the OCC's own risk exposure create a potential conflict of interest that could compromise the objectivity of risk management decisions. By rejecting the proposed rule change, the SEC has reaffirmed its commitment to ensuring regulatory decisions are free from undue influence and conflicts of interest, thereby enhancing investor confidence and market stability. In conclusion, the SEC's decision to reject the OCC's proposed rule change is a commendable step towards promoting transparency, mitigating systemic risks, and protecting investors' interests. Upholding these principles is essential for maintaining a fair, orderly, and efficient financial market that fosters trust and confidence among all stakeholders. Thank you for your attention to this matter. Should you require any further information or assistance, please do not hesitate to contact me. Sincerely, alex