Jan. 29, 2024
Subject: Urgent Concerns Regarding SR-OCC-2024-001 and Call for Increased Transparency and Fair Market Practices TO: SEC I am writing to express my strong opposition to the proposed rule change by the Options Clearing Corporation (OCC) in SR-OCC-2024-001, entitled "Proposed Rule Change by The Options Clearing Corporation Concerning Its Process for Adjusting Certain Parameters in Its Proprietary System for Calculating Margin Requirements During Periods When the Products It Clears and the Markets It Serves Experience High Volatility." Lack of Transparency Raises Red Flags: My primary concern is the extreme lack of transparency surrounding this proposal. Crucial details in Exhibit 5 and supporting information are heavily redacted, hindering meaningful public review and informed comment. This opacity in a decision with such significant market implications is unacceptable. Without full transparency, this proposal should be rejected on that basis alone. Protecting Clearing Members While Exposing the Public: Moreover, the OCC's attempt to blame U.S. regulators for not imposing stricter procyclicality controls exposes a worrisome trend. The proposed margin reduction measures appear designed to shield Clearing Members from potentially costly trades, increasing risks for the OCC and ultimately, the public. In effect, this creates a "Too Big To Fail" environment where systemic problems are swept under the rug. Suggested Modifications for a Fair and Stable Market: Instead of rubber-stamping margin reductions, the OCC should prioritize: Enforcing margin requirements commensurate with risk, incentivizing Clearing Members to manage their portfolios responsibly. Enhanced external auditing and supervision to identify and mitigate risks before they become systemic. Prioritizing Clearing Member deposits over OCC pre-funded resources in the Loss Allocation waterfall to incentivize mutual risk management. These actions would foster a fairer, more transparent, and ultimately more stable market environment for all participants, including retail investors like myself. Investing in Public Good and Transparency: The OCC's role as a Systemically Important Financial Market Utility (SIFMU) demands the highest standards of transparency and accountability. I urge you to reject this proposal in its current form and demand full public disclosure before considering any amendments. Let us build a financial system that prioritizes the public good and operates with unwavering transparency. Thank you for your time and consideration. Sincerely, A Concerned American Retail Investor