May 17, 2024
As a retail investor, I am writing to express my concerns regarding Rule SR-OCC-2024-001, which proposes adjustments to margin thresholds during high volatility periods. This adjustment is problematic because it shifts the goalposts when clearing members struggle to meet their financial obligations. Margin calls are meant to prevent overextension and ensure adequate collateral to cover potential losses. Adjusting margin thresholds during volatility risks insufficient collateral, increasing the likelihood of defaults and destabilizing the financial system. This raises critical questions about the integrity of the options market and the OCC's role in risk management. The OCC must ensure contract fulfillment and manage trading risk. Margin calls are crucial safeguards, but adjusting thresholds during volatility undermines this principle, increasing systemic risk. The proposal allows "kicking the can down the road," encouraging risky behavior and introducing arbitrariness. The lack of transparency in adjusting margin thresholds and granting unchecked authority to the FRM Officer raises fairness and conflict of interest concerns. In conclusion, Rule SR-OCC-2024-001 threatens financial stability and integrity. I urge the SEC to reject this proposal, ensuring investor protection and market stability through clear guidelines and transparent rule-making. Thank you for your attention to this matter. I trust the SEC will carefully consider these concerns. Sincerely, A Concerned Retail Investor