Feb. 4, 2024
Dear SEC and Gary Gensler, I am writing to express my strong opposition to the proposed rule change, which raises significant concerns about its potential impact on retail investors. The proposal introduces risks such as shielding risky positions during market volatility and highlights conflicts of interest within the Financial Risk Management (FRM) Officer's role. The lack of transparency due to redacted materials accompanying the proposal adds to these apprehensions. Furthermore, there is a considerable worry that the rule might undermine crucial risk management mechanisms, like margin calls, leading to unchecked risk exposure for retail investors. To address these concerns, I strongly recommend reassessing the loss allocation framework to prioritize Clearing Fund deposits over the OCC's pre-funded resources. Additionally, implementing an independent review mechanism would ensure an impartial evaluation of control settings, fostering confidence in the risk management process. Enhancing transparency measures, such as providing non-confidential summaries of redacted materials, and strengthening oversight mechanisms are vital steps to protect retail investors. Public accessibility to stress testing results and collaboration with stakeholders for industry-wide standards and best practices are crucial for maintaining market stability. In conclusion, I vigorously oppose the proposed rule change and urge the SEC to reconsider its potential adverse effects on retail investors. A financial environment prioritizing fairness, transparency, and the interests of retail investors is paramount. I trust that the SEC will thoroughly consider these concerns during the rulemaking process. Thank you for your attention to this matter. Sincerely, Michael Gilbert