Jan. 31, 2024
Subject: Concerns and Recommendations on Proposed Rule Changes (SR-OCC-2024-001) Dear SEC, I trust this letter finds you well. I am writing as an engaged investor to express my concerns and offer recommendations regarding the proposed rule changes, specifically those outlined in SR-OCC-2024-001, aiming to alter parameters for calculating margin requirements during periods of high market volatility. While acknowledging the importance of adapting regulations to evolving market dynamics, I am apprehensive about the potential impact of the proposed changes on market stability. The adjustments, if not carefully calibrated, may inadvertently introduce volatility rather than mitigate it, posing risks to market participants and overall financial stability. Moreover, my concerns extend to the lack of transparency in redacted materials associated with SR-OCC-2024-001. While I recognize the need for confidentiality in certain matters, an absence of non-confidential summaries limits public understanding and hinders constructive discourse. This lack of transparency raises questions about the fairness and inclusivity of the decision-making process. Furthermore, there is a perceived inherent conflict of interest that needs careful consideration. Balancing the interests of various stakeholders while ensuring the integrity of risk management practices is paramount. I urge the [appropriate regulatory body] to address and mitigate potential conflicts to maintain trust in the regulatory process. In light of these concerns, I recommend the following refinements to SR-OCC-2024-001: 1. **Prioritising Enhanced Transparency Requirements:** Advocate for increased transparency in reporting and decision-making processes related to risk management measures during periods of high market volatility. 2. **Strengthening Oversight Mechanisms:** Propose a more active role for regulatory bodies in overseeing the changes to margin requirements, contributing to accountability in risk management practices. 3. **Incorporating Public Input:** Suggest the incorporation of public input through consultations and hearings during the rulemaking process, especially when adjusting parameters for margin requirements. 4. **Establishing Industry-wide Standards:** Encourage collaboration with stakeholders to establish industry-wide standards and best practices, particularly during volatile market conditions. 5. **Advocating for Public Accessibility:** Support public accessibility of stress testing results and other relevant information to showcase the effectiveness of risk management measures. 6. **External Oversight Committee:** Consider the establishment of an external oversight committee comprised of industry experts to ensure impartial evaluation and scrutiny of risk management practices during periods of high market volatility. These suggestions collectively aim to fortify oversight, enhance transparency, and uphold accountability, thereby ensuring the integrity and fairness of our financial markets. As an engaged investor, I am committed to fostering a financial environment that prioritises fairness, transparency, and the well-being of all market participants. I trust that the [appropriate regulatory body] will thoroughly consider these concerns during the rulemaking process and work towards a rule that not only addresses risk management but also upholds the broader principles of market integrity. Sincerely, Kevin Czarnota