Feb. 6, 2024
Dear SEC, I hope this email finds you well. As a concerned participant in the financial markets & a supporter of transparent, fair, and stable market practices, I am writing to express my firm opposition to the proposed rule SR-OCC-2024-001. While acknowledging the purpose of the rule to codify OCC's process for making adjustments during high volatility periods, the lack of transparency, especially the redaction of specific details related to the calculation of parameters and margin thresholds, raises serious concerns. Transparency is essential for market participants to assess the fairness and effectiveness of risk management measures. The consistent use of idiosyncratic control settings, the concentration of significant decision-making authority in the hands of a single FRM Officer, and the potential systematic risks associated with frequent adjustments during high volatility are alarming. The proposed rule, as it stands, poses a threat to reducing margin call requirements by granting the OCC extensive authority to adjust margin thresholds based on undisclosed parameters during critical events. Furthermore, the lack of solicited comments for public input raises questions about the transparency and fairness of the rule-making process. In a regulatory environment, active engagement with stakeholders is crucial to ensure well-rounded rules that address potential concerns from different parties. I urge you to consider the suggested improvements: Modify the Loss Allocation waterfall, prioritizing Clearing fund deposits of non-defaulting firms over OCC's pre-funded financial resources. Introduce external auditing and supervision as a "fourth line of defense" with public reporting. Strengthen oversight mechanisms, actively involving regulatory bodies during heightened market volatility. Establish industry-wide standards and best practices for consistent risk management. Provide clearer guidelines for idiosyncratic controls, preventing misuse with a structured evaluation framework. Emphasize enhanced transparency requirements in reporting and decision-making. advocate for public accessibility of stress testing results, showcasing effectiveness and building trust. Incorporate public input through consultations and hearings, fostering inclusivity. Consider establishing an external oversight committee for impartial evaluation and scrutiny. These measures are essential to fostering trust among market participants and maintaining the stability and integrity of our financial markets. In closing, I strongly oppose the adoption of proposed rule SR-OCC-2024-001 in its current form and encourage a thorough reconsideration of its implications. Thank you for your attention to this matter. Sincerely, Charles Dubuque Jr. A Concerned Household Investor