Mar. 3, 2024
Dear Sir or Madam, As a household investor, I am writing to express my concerns and state my opposition to the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. The use of "idiosyncratic volatility control settings" to adjust margin thresholds during times of high volatility introduces a risk because it lacks transparency in the calculation and implementation process. This is concerning to me. Without clear guidelines on how these settings are determined, there is a potential for arbitrary or ad-hoc adjustments, allowing the Options Clearing Corporation (OCC) to alter the criteria whenever Clearing Members require assistance. This flexibility raises concerns about fairness, as it may create an environment where the rules can be changed based on individual circumstances, potentially favoring certain market participants or introducing an element of unpredictability. These rules create an unfair marketplace for market participants, especially retail investors, who are forced to face the consequences of long-tail risks while the OCC repeatedly waives margin calls for Clearing Members by repeatedly reducing their margin requirements. For this reason, this rule proposal should be rejected and Clearing Members should be subject to strictly defined margin requirements, just as all other investors are. Sincerely, MP