Feb. 4, 2024
I am writing to express opposition to the proposed rule change by the options clearing corporation. The proposal makes changes to the parameters of margin requirements, and focuses on protecting clearing house members who repeatedly benefit from reduced margin requirements. The rule change seeks to label clearing members as “too big to fail” and absolves their responsibilities to pay for the risks they have taken. In light of these issues, I propose the following modifications to the rule: ??Increase and enforce margin requirements to align with Clearing Member risks, preventing excessive risk-taking and avoiding the "Too Big To Fail" scenario. ??Introduce external auditing and supervision as a "fourth line of defense," enhancing transparency and proactive risk management with public reporting. ??Modify the Loss Allocation waterfall by prioritizing Clearing fund deposits of non-defaulting firms over OCC's pre-funded financial resources, promoting self-regulation among Clearing Members. These recommendations aim to address the concerns outlined and contribute to a more transparent, accountable, and stable market environment.