May 9, 2024
Dear SEC, I am writing to express my strong opposition to the proposed rule change by the Options Clearing Corporation (OCC) – SR-OCC-2024-001. This proposal would allow the OCC to reduce margin requirements for clearing members during periods of high volatility. I believe this is unfair, risky, and could create systemic instability in the financial system. Lack of Transparency: The details of this proposal are heavily redacted, making it impossible for the public to fully understand or comment on its potential consequences. This lack of transparency is deeply concerning and should be grounds for rejecting the proposal itself. Unfair Treatment of Market Participants: The proposal would create an uneven playing field for market participants. Retail investors, like myself, would still be subject to full margin requirements, while clearing members could benefit from reductions during volatile periods. This is simply unfair. Increased Systemic Risk: Reducing margin requirements during periods of high volatility increases the risk of clearing member defaults. This could trigger a cascade of failures, destabilizing the entire financial system. The proposal prioritizes protecting clearing members over managing risk, potentially putting the entire system at risk. Alternative Solutions: Instead of reducing margin requirements, the OCC should consider: Increasing margin requirements during volatile periods. Implementing stricter risk management practices for clearing members. Increasing transparency in the OCC's operations. Conclusion: I urge the SEC to reject SR-OCC-2024-001. This proposal prioritizes clearing member profits over the safety and stability of the financial system. It is essential to maintain a fair, transparent, and resilient market for all investors. Thank you for your time and consideration. Sincerely, Alexander Cooper Superstonk Pty Ltd, Director