May 14, 2024
SEC, I am writing to express my support for the SEC's disapproval regarding the proposed rule change by The OCC, SR-OCC-2024-001. This proposal seeks to adjust certain parameters in OCC’s margin requirement calculations during periods of high volatility, as outlined in the Federal Register Release No. 34-100009. My primary concern revolves around the transparency of the financial system which hinder effective public review and commentary. Such opacity necessitates rejection of the proposal on these grounds alone, ensuring that any regulatory changes are subject to thorough public scrutiny. Additionally, the proposal suggests a reduction in margin requirements, potentially exacerbating systemic risks by enabling clearing members to avoid addressing the risks associated with highly volatile market conditions. This approach not only threatens the stability of the financial system but also seems to protect specific interests at the expense of general market fairness. The OCC, being a self-regulatory organization and designated as a Systemically Important Financial Market Utility, bears the responsibility to maintain rigorous and transparent regulatory practices. I find it concerning that the OCC would shift the burden of regulatory inadequacies onto U.S. regulators, as this undermines the credibility and reliability of the OCC to autonomously safeguard the financial markets. Moreover, the repeated use of "idiosyncratic" and "global" control settings to selectively reduce margin calls appears to undermine the integrity of the financial safeguards intended to stabilize the clearing system during market stress. Such practices could potentially lead to scenarios where systemic risks are magnified rather than mitigated, pushing the financial system further towards instability. Given these considerations, I advocate for the proposal’s rejection, urging the implementation of stricter, clearly defined margin requirements that align with the overarching goal of protecting all market participants and upholding market integrity. It is imperative that the OCC revises its approach to ensure equitable treatment across all market participants and to prevent the propagation of a "rules for thee, but not for me" environment. Thank you for considering my viewpoint and allowing me the opportunity to contribute to the rulemaking process aimed at safeguarding a fair, orderly, and efficient market. Best regards, Gunther Fox