Feb. 2, 2024
I am writing to express my concerns over the proposed rule SR-OCC-2024-001 in release 34-99393. The proposed rule appears to reduce margin requirements for OCC participants during times of high market volatility. In other words, it protects OCC members from being on the wrong side of risky derivatives bets. Margin requirements are an important feature of the market by holding entities accountable for risk. If margin requirements are reduced during times of high market volatility, it greatly reduces the risk of these derivative bets. It benefits the OCC members, but nobody else. Reducing risk encourages financial institutions to continue making highly leveraged bets with very little downside. The derivatives market is already astronomically large. Protecting institutions from their risky derivatives bets is unacceptable. There also appears to be a conflict of interest in this case: The rule yields a significant amount of power over changing margin requirements to the FRM Officer. The FRM Officer is interested in protecting the OCC and its members from risk during high market volatility. Gee, I too would like to be able to place massive risky bets using leverage, and have little to no consequence when I am wrong. Sounds great. Another concern is that so much of the information in this proposed rule change is redacted. How can we consider a rule that will impact fundamental processes of the market when so much information is unavailable? Market transparency is vital to fairness. Part of the SEC's mission statement (paraphrased) is to protect ALL investors by ensuring truth and fairness in the market, and to deter misconduct and hold wrongdoers accountable. This rule would provide a benefit strictly to the OCC and its members, but American people are offered no such protections. The SEC has a duty to the American people to promote fairness and transparency in securities markets. Therefore, you MUST vote 'NO' on rule SR-OCC-2024-001. Very Respectfully, An American taxpayer, market participant, and concerned citizen