Feb. 1, 2024
Dear Securities and Exchange Commission, I'm writing to express reservations about the Options Clearing Corporation's (OCC) proposed rule change on margin requirements during market volatility. As a committed long-term investor, I seek to provide insights on this matter. The current proposal inadvertently shields high-risk positions from standard risk management practices, such as margin calls during market turbulence. This raises concerns about unchecked growth in risky positions, jeopardizing long-term market stability. The assigned role of the Financial Risk Management (FRM) Officer, with a primary duty to protect OCC's interests, creates an inherent conflict. Lack of transparency in redacted materials accompanying the proposal further hinders our ability to assess its effectiveness and engage in informed public discourse. In light of these concerns, I recommend a reevaluation of the OCC's loss allocation framework. Prioritizing Clearing Fund deposits of non-defaulting firms over OCC's pre-funded resources ensures more immediate contributions from Clearing Members, promoting equity and transparency. Additional safeguards and modifications include an independent review mechanism, enhanced transparency requirements, strengthened oversight, public input through consultations, industry-wide standards, and an external oversight committee. These measures aim to fortify oversight, enhance transparency, and uphold accountability. As an engaged investor, I trust the SEC will consider these concerns to ensure a rule that addresses risk management and upholds market integrity. Sincerely, RDR nt from my iPhone