Feb. 9, 2024
Dear Securities and Exchange Commission, I'm concerned about the proposed rule change by the Options Clearing Corporation (OCC) regarding margin requirements during high market volatility. As a long-term household investor, I believe this could inadvertently shield risky financial positions, leading to potential market instability. The OCC's proposal raises questions about its risk management effectiveness, especially given its history of frequent adjustments to margin requirements. Additionally, the proposal places significant responsibility on the Financial Risk Management Officer, potentially creating conflicts of interest. Transparency is crucial for trust in our financial system, but the redacted materials accompanying the proposal limit public evaluation. This lack of transparency undermines informed decision-making. While the OCC aims to mitigate risks during volatile periods, it's essential to ensure that risk management measures don't shelter bad investments. Adjusting margin requirements is vital for market stability, but it must align with broader market interests. I recommend a review of the OCC's loss allocation framework to prioritize Clearing Fund deposits of non-defaulting firms. This adjustment would provide more protection to non-defaulting Clearing Members and promote fairness. Furthermore, I propose additional safeguards, including enhanced transparency requirements and an independent review mechanism. These measures aim to strengthen oversight, enhance transparency, and uphold accountability in our financial markets. As an engaged investor, I'm committed to fostering fairness and transparency in our financial system. I trust that the SEC will carefully consider these concerns and work towards a rule that prioritizes market integrity. Sincerely, A Concerned Household Investor