May 14, 2024
I am writing to express my wholehearted support for the Securities and Exchange Commission's (SEC) recent decision to reject the proposed rule change submitted by the Office of the Comptroller of the Currency (OCC). This decision is a testament to the SEC's unwavering commitment to transparency, risk mitigation, and investor protection, which are the cornerstones of a fair and stable financial market. First and foremost, transparency is paramount in maintaining the integrity of our financial markets. The lack of transparency in the OCC's proposed rule change was deeply concerning. Investors rely on clear and comprehensive information to make informed decisions, and any regulatory change that compromises this transparency poses a significant risk to market participants. By rejecting the proposed rule change, the SEC has upheld its duty to ensure that all market participants have access to the information they need to make sound investment decisions. Additionally, the potential systemic risks posed by the proposed margin requirement adjustments during market volatility cannot be understated. Margin requirements play a crucial role in safeguarding against excessive leverage and market instability. Allowing for sudden adjustments to these requirements, especially during times of heightened market volatility, could have far-reaching consequences for the stability of our financial system. The SEC's decision to reject the proposed rule change reflects a prudent approach to risk management and underscores the importance of maintaining stability in our financial markets. Furthermore, the conflict of interest inherent in the role of the Financial Risk Management (FRM) Officer raised serious concerns about the integrity of the proposed rule change. The FRM Officer, as outlined in the OCC's proposal, would have been tasked with both assessing and mitigating risks, while also serving the interests of the institution. This dual role presents an inherent conflict of interest that undermines the effectiveness of risk management practices. By rejecting the proposed rule change, the SEC has demonstrated its commitment to upholding the highest standards of governance and ensuring that regulatory decisions are free from conflicts of interest. In conclusion, I commend the SEC for its diligence and foresight in evaluating the proposed rule change and ultimately rejecting it in the best interest of investors and the financial market as a whole. Transparency, risk mitigation, and investor protection are not merely ideals to strive for but essential principles that must guide our regulatory framework. I stand in full support of the SEC's decision and look forward to continued collaboration in safeguarding the integrity and stability of our financial markets. Thank you for your attention to this matter. Sincerely, Ruben A.