May 16, 2024
Dear SEC executives and staff, As an investor, I take my investing seriously - as I am sure all of you do!! I have read, fully, the potential rule change(s) pertaining to SR-OCC-2024-001 - and I have questions, as follows: (1) If a clearing member defaults on their financial obligations, the OCC, as the central counterparty, has an obligation to the counterparties on the other side of , say, a short sale, correct ?? ** The answer should be "YES". ** (2) The OCC has a fiduciary duty to ensure that counterparties of short sales, such as the shareholders - ex: (GME), (AMC) or (NVDA), are protected in the event of defaults by clearing members involved in such short selling transactions. This is an essential responsibility for upholding the integrity and stability of the market!! As such, why would the OCC be creating a rule to bail out the 'short selling' Wall Street firms - essentially prolonging the inevitable if they lack the financial capacity to cover their bets?? ** That is what this rule, in essence, does - and that's just wrong!! The answer is: "It shouldn't". ** (3) If the SR-OCC-2024-001 rule is to ascertain parameters in the OCC's proprietary system for calculating margin threshold requirements during high volatility - why am I not provided with the specific details on how these parameters will be calculated ?? ** The answer is: They should be made available to everyone** (4) I have no idea how these margin threshold requirements are calculated, and everything in the proposal's supporting evidence as related to this is REDACTED. Why?? ** The answer is: They shouldn't be redacted at all ** (5) If I understand this rule correctly, and I think I do, if multiple clearing members default, the OCC would also incur losses from having to cover those defaults, yes?? Therefore, it would indeed be in the OCC's best interest to prevent clearing members from defaulting - because the OCC would lose money also, yes?? ** The answer to both questions should be: "YES" ** (6) If I understand this next item correctly, the OCC wants to give significant authority to OCC's Financial Risk Management (FRM) section for approving idiosyncratic control settings. In my opinion, this introduces a significant risk to the OCC and it poses a conflict as they are required to safeguard both OCC's interests and at-risk Clearing Members. Being that this proposed rule favours Clearing Members at the expense of market fairness and investor protection, this issue has been flagged to the SEC for commentary and review. In my opinion, it appears the OCC is fearful of clearing member default toppling the market. Not wanting to use their own funds to bail out bad CLEARING MEMBER bets, the OCC is proposing a rule to adjust margin thresholds during volatile market periods. The SEC had the good sense to REJECT this proposal - and now, regular OTC investors have the opportunity to support this decision and get it removed completely!! After giving this rule change a thorough review, I am recommending that the SEC fully remove and eliminate this OCC rule completely. It is a rule fraught with peril and has enough conflict and risk to warrant its dismissal and removal!! Thank you for your time and attention to this email! Regards to all, William M. "Bill" James, Jr. State of Virginia resident and independent investor email: WmJames.Va@gmail.com