Jan. 29, 2024
Dear SEC, I am writing to express my concerns regarding the proposed rule change, SR-OCC-2024-001 34-99393. This comment aims to provide a concise overview of the main issues associated with the proposal, emphasizing potential unintended consequences and underlying conflicts of interest. The proposed rule change introduces concerns about its impact on market stability, particularly during volatile conditions. The potential consequence of shielding risky positions raises red flags and requires careful consideration. Additionally, the role of the Financial Risk Management (FRM) Officer introduces an inherent conflict of interest that could compromise the impartiality of risk management decisions. The lack of transparency, evident through redacted materials accompanying the proposal, further exacerbates concerns about accountability. Evaluation of Risk Management Mechanism: The significance of risk management mechanisms, such as margin calls, cannot be overstated in maintaining market stability. There is a concern that the proposed rule change may undermine these mechanisms, leading to unchecked risk exposure. It is crucial to strike a balance between risk management and broader market interests by adjusting parameters thoughtfully. Specific Recommendations: I recommend a reassessment of the loss allocation framework, giving priority to Clearing Fund deposits over the OCC's pre-funded resources. This adjustment would better align with the goal of mitigating systemic risk. Additionally, I propose the implementation of an independent review mechanism to ensure impartial evaluation of control settings, promoting a more robust risk management process. Additional Safeguards and Modifications: To enhance transparency, I advocate for providing non-confidential summaries of redacted materials, enabling market participants to better understand the proposed changes. Strengthening oversight mechanisms and incorporating public input in decision-making processes is essential for accountability and legitimacy. Emphasizing industry-wide standards and best practices will further contribute to overall market stability. Industry-Wide Standards and Best Practices: Collaboration with stakeholders is crucial to establishing industry-wide standards and best practices. Public accessibility to stress testing results will showcase the effectiveness of risk management measures, fostering trust within the financial community. Conclusion: In conclusion, I reiterate my commitment to fostering a financial environment that prioritizes fairness and transparency. I am confident in the SEC's ability to thoroughly consider the concerns raised during the rulemaking process. Your attention to these issues is appreciated, and I trust that the final decision will reflect a balanced approach that safeguards market stability. Sincerely, Brandon Hansen Concerned Retail Investor [REDACTED] Virus-free.www.avast.com