May 9, 2024
Hey there SEC, I hope this note finds you in good spirits. I'm reaching out as a fellow participant deeply invested in our financial markets, which I believe should operate transparently and fairly. I’m writing to express my deep concerns about the proposed rule SR-OCC-2024-001. While I understand its intent during periods of high volatility, the lack of detail on how margin parameters and thresholds are calculated is unsettling. Transparency isn’t just nice to have; it’s crucial for us to evaluate whether the rules in place are fair and effective. It’s particularly worrying how much power is concentrated in the hands of a single FRM Officer and how often these idiosyncratic controls are applied. This could lead to systemic risks, something we should all be wary of. Now, onto something that strikes me as outright crazy: the fact that OCC has waived margin calls for clearing members more than 50 times in a year for specific security risks. That’s a lot of leeway, and frankly, it feels like a gamble with stakes too high for comfort. This isn’t about stifling the market; it’s about ensuring it’s not a free-for-all where excessive risks can undermine the whole system. A version of the rule I’d advocate for would be one that genuinely holds members accountable and curbs these high-stakes gambles by enforcing strict margin requirements. Let’s not throw out the baby with the bathwater by weakening the market’s integrity. Also, the rule-making process seems to skip over gathering public input. Engaging with stakeholders isn’t just a regulatory nicety—it’s a necessity to create balanced and effective regulations. I strongly urge you to reconsider this rule. Could we not enhance it with stricter margin requirements, mandatory external audits, more robust oversight, and better transparency? These steps are essential to maintain trust and stability in the markets we rely on. Thanks for taking the time to consider this. I believe by working together on these issues, we can ensure our financial systems are both robust and fair. Warm regards. Sincerely, Steven D. Hicks steven.d.hicks@gmail.com (510)295-3261