Jan. 31, 2024
Dear SEC, I'm writing to express concerns about the proposed rule change by the Options Clearing Corporation (OCC) that adjusts margin requirement parameters during high market volatility. The current proposal seems to unintentionally shield risky positions from standard risk management, potentially leading to unchecked growth in risky positions, posing long-term stability concerns. Specifically, the role of the Financial Risk Management (FRM) Officer raises a red flag due to a potential conflict of interest, and the lack of transparency in redacted materials limits our ability to evaluate the proposal effectively. To address these concerns, I recommend prioritizing Clearing Fund deposits of non-defaulting firms over OCC's pre-funded resources in the loss allocation framework. Additionally, an independent review mechanism and enhanced transparency measures, such as providing non-confidential summaries of redacted materials, can reinforce accountability and public trust. Other refinements include advocating for transparency, strengthening oversight mechanisms, involving public input, establishing industry-wide standards, and considering an external oversight committee. As an engaged investor, I believe these measures will fortify oversight, enhance transparency, and uphold accountability in the financial markets. I trust that the SEC will thoroughly consider these concerns for a rule that addresses risk management while upholding broader principles of market integrity. Sincerely, Alex Gíslason