Subject: File No. SR-OCC-2024-001
From: Patrick Hammond

To the SEC, I hope whoever is reading this is having a good day so far. Once again the goalposts have been moved by an SRO to avoid total collapse. The very agency that is tasked with the clearing and settlement of options and derivatives, has been tasked with the impossible… the clearing and settlement of options and derivatives. Rather than at least attempting to do their job the OCC has decided to opt for kicking the can yet again in order to stave off the inevitable explosion, and collapse of bad derivative bets that its clients have been building up for more than a decade now. The majority of derivative contracts held by banks and hedge funds are OTC and untracked, meaning we have no way of knowing how bad the damage is until it is far too late. To change the rules last minute in periods of high volatility so the members don’t default and start a cascading failure is a testament to the failure that is SRO’s and illustrates how bad the OCC is letting things get. I have no faith that the OCC and its clearing members are sufficiently capitalized to pay for the losses they will inevitably incur. As a household investor I appreciate the opportunity to comment on this proposed rule and have some major concerns. First off the details of the proposal provided in Exhibits 3 & 5 are redacted almost in their entirety save for the table of contents. In addition, the OCC has not solicited public comments and has absolutely no intention of doing so. This lack of transparency does not instill any confidence whatsoever and makes it impossible for the public to engage in any meaningful in depth review. Secondly, this rule reads to me as yet another band-aid fix that does nothing to unwind the terrible trades being made by clearing members of the OCC. By simply allocating unchecked power to a single FRM officer, one can reasonably assume that they will simply rubber stamp any actions to protect its clearing members from default until there is no other way to keep cascading failure from happening. There is no incentive to trade within the scope of reality seeing as the OCC will pick up the bill before they resort to making non-defaulting members allocate losses. This behavior poses a risk to the entire financial system if not the stability of our entire government. Please do not allow this SRO to reduce margin requirements in periods of high volatility. The potential for blowback is too great to ignore here. I implore the SEC to put forth derisking rules and regulations to stem the usage of unchecked derivatives and the extremely risky behavior these SRO’s and financial firms engage in. The bubble created by this behavior is inevitable and will pop. We need to stop pumping it further before the damage becomes irreparable. Part of the free market and capitalism as a whole is letting the losers lose. Picking and choosing winners will reduce any faith investors have in a “free and fair market” and in turn faith in our whole system of government, not just the markets. I do not support the approval of this proposal in any way shape or form. Thank you, Patrick Hammond Household Investor