Feb. 4, 2024
As an American citizen, tax payer, and household investor I am writing to comment on SR-OCC-2024-001 34-99393 "Proposed Rule Change by The Options Clearing Corporation Concerning Its Process for Adjusting Certain Parameters in Its Proprietary System for Calculating Margin Requirements During Periods When the Products It Clears and the Markets It Serves Experience High Volatility". According to this rule, the OCC will be able to dramatically lower or waive margin requirements during periods of high volatility in the stock market to protect clearing members from defaulting. Not only does this provide preferential treatment to a few but not all market participants, it also continues to incentivize risky behavior well into the future. If this passes, clearing members will have every incentive to continue their risk-taking behavior knowing that the OCC will reduce margin requirements should any of their positions threaten default. If clearing members fail to adequately regulate each other then they should bear the consequences of default. If this new rule passes then the consequences of default no longer exist, creating an incentive to never self-regulate and always take the highest risk positions. If passed, reckless behavior from clearing members will only increase since the possibility of default no longer exists when margin requirements can be reduced to near zero. In addition to this, it's an offense to the American public to see that once a clearing member defaults - and after the clearing fund deposits are depleted - that the American tax payer (via the OCC's SIFMU backed assets) have to pay the losses before any non-defaulting clearing members. This must change. Firstly, margin requirements need to stay constant per the STANS methodology. There should never be a situation where margin requirements are lowered, changed, or waived due to market volatility. Secondly, after a clearing member defaults (and once the clearing fund deposits are depleted) the other non-defaulting clearing members should be next in line, NOT the American tax payer. Please realize that until this criminality in the stock market ends that the SEC, OCC, DTC, DTCC, and FINRA should expect relentless congressional hearings and subpoenas. Thank you, William