Feb. 8, 2024
Thank you for the opportunity to comment on SR-OCC-2024-001 34-99393 entitled “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” As a retail investor; I appreciate the opportunity to share my concerns regarding the proposed rule change by The Options Clearing Corporation (OCC) regarding adjustments to margin requirements during periods of market volatility. Firstly, I find the lack of transparency in the proposal troubling. The extensive redaction of key details impedes public review and meaningful comment, undermining the democratic process. Moreover, the proposal fails to adequately address systemic risks. The potential for a single Clearing Member default to trigger a domino effect, endangering the stability of the financial system, is deeply concerning. I am particularly wary of the repeated reductions in margin requirements favoring Clearing Members, potentially creating an unfair advantage in the market. This undermines the principles of fairness and equality that should underpin our financial system. Furthermore, the conflict of interest inherent in the role of the Financial Risk Management Officer is troubling. Prioritizing the protection of Clearing Members over the OCC's interests raises serious ethical questions. In light of these concerns, I propose several modifications to the rule change. These include enforcing higher margin requirements, implementing external auditing, and revising the loss allocation waterfall to prioritize non-defaulting Clearing Member deposits over OCC resources. In conclusion, I urge you to reject the proposed rule change and instead focus on measures that ensure fairness, transparency, and resilience in our financial markets. Thank you for considering my input. Sincerely, Biniam Sent from Yahoo Mail for iPhone