May 7, 2024
I am writing to express my deep concerns regarding the proposed rule change by the Options Clearing Corporation (OCC) to adjust parameters for calculating margin requirements during periods of high market volatility. As a stakeholder in the financial markets and a proponent of market stability and transparency, I believe it is crucial to address several significant issues with this proposal. Firstly, the potential impact on market stability is a paramount concern. Margin requirements play a crucial role in risk management and maintaining market integrity. Any adjustments to these requirements, especially during periods of heightened volatility, must be carefully evaluated to ensure they do not exacerbate market instability or increase systemic risk. Secondly, there are concerns about the lack of transparency in the redacted materials related to this proposal. Transparency is fundamental to fostering trust and confidence in financial markets. Redacted materials obscure critical information that stakeholders need to make informed decisions and assess the potential impact of regulatory changes accurately. Without full transparency, it is challenging to assess the rationale behind the proposed adjustments and their potential consequences fully. Furthermore, the role of the Financial Risk Management (FRM) Officer introduces an inherent conflict of interest. While the FRM Officer plays a crucial role in managing risk within the OCC, their role also involves ensuring the OCC's financial viability. This dual role could potentially create conflicts between risk management objectives and financial interests, raising questions about the impartiality and objectivity of the proposed rule change. I respectfully urge the Securities and Exchange Commission (SEC) or the relevant regulatory body to conduct a thorough reconsideration of the proposed rule change. This reconsideration should prioritize transparency, risk mitigation, and the broader market's well-being. I believe that any changes to margin requirements should be based on comprehensive analysis, transparent communication, and a clear understanding of their potential impact on market stability and participant confidence. Thank you for considering my concerns. I look forward to a thorough review of this matter and trust that regulatory decisions will prioritize the best interests of the financial markets and their participants. Sincerely, Tee Semera