Feb. 1, 2024
To the SEC, Here I am once again, a concerned citizen trying to help the SEC to prevent the fraud and manipulation of the worlds capital markets. When I came across this proposal by the OCC I found the imbalances of power to be completely unacceptable. For markets to be free and fair, rules that are passed should consider all market participants fairly. I would ask the question, if I couldn’t make my margin requirements with my broker, would I be given an exemption against what was owed? The last time that margin requirements were waived for large market participants, millions of people were defrauded out of their hard earned money. No suitable or just repercussions were felt by parties which undermined the freedom and fair operation of the stock market, and yet here we are 3 years later and the OCC wants to make further changes to our markets which double down on the ‘rules for thee and not for me’ mantra that all of these so called SRO’s proclaim. Protection of capital markets should not be something which is ascertained by bending the rules for participants with larger influence and capital whilst undermining the core principles of the markets themselves. There are parts of this proposal where the wording highlights an intent to defraud regular investors at the times when they stand to gain the most from their investments - for example: “OCC has observed that this particular model may produce results that are "procyclical," which means that changes in margin requirements produced by the model may be positively correlated with the overall state of the market and, if not appropriately addressed, could threaten the stability of its members during periods of heightened volatility” - what this statement means to me is that when these entities are caught short through their own over-leveraging and manipulation of the markets, they want the SEC to green light a free pass for them to further manipulate the core mechanics of the market to protect themselves and offload the burden to the taxpayer via the Clearing Agency. The sheer narcissism and entitlement involved in such a suggestion is simply astounding. I’m seriously concerned about the lack of transparency in our financial system as evidenced by this rule proposal, amongst others. The details of this proposal in Exhibit 5 along with supporting information (see, e.g., Exhibit 3) are significantly redacted which prevents public review making it impossible for the public to meaningfully review and comment on this proposal. Without opportunity for a full public review, this proposal should be rejected on that basis alone. A systemic risk exists because Clearing Members as a whole are insufficiently capitalized and/or over-leveraged such that a single Clearing Member failure (e.g., from insufficiently managing risks arising from high volatility) could cause a cascade of Clearing Member failures. In layman’s terms, a Clearing Member who made bad bets on Wall St could trigger a systemic financial crisis because Clearing Members as a whole are all risking more than they can afford to lose. A far more suitable proposal would be to require all Clearing Members to be sufficiently capitalised regardless of market conditions. This would in turn lead to these SRO’s having a responsibility for their reckless market behaviour and provide a backstop to regular investors that are tired of this type of manipulative and frankly arrogant attitude towards a very serious part of the global economy. I request that you take my comments under consideration as part of a wider public outcry against what is nothing more than an attempt to subvert the core mechanics of the stock market for further unregulated, ungoverned and centralised control. Thank you for your time.