May 14, 2024
Dear Securities and Exchange Commission, I am writing to express my strong support for the SEC's recent decision to reject the Options Clearing Corporation's (OCC) proposed rule change. I commend the Commission's commitment to maintaining the integrity and stability of our financial markets through its rigorous oversight. The transparency of market operations is a cornerstone of investor confidence and market efficiency. The OCC's proposed rule change lacked sufficient transparency, making it difficult for market participants and stakeholders to fully understand the implications of the adjustments to margin requirements. Transparency is essential in ensuring that all market participants are on a level playing field, with equal access to critical information that influences their investment decisions. Moreover, the potential systemic risks associated with the proposed margin requirement adjustments during periods of market volatility present significant concerns. Margin requirements serve as a buffer to absorb potential losses and mitigate the risk of default. Adjusting these requirements without a robust, transparent framework, especially during volatile market conditions, could exacerbate market instability rather than alleviate it. The potential for such adjustments to trigger sudden liquidity demands poses a threat not only to individual firms but also to the broader financial system. Additionally, the role of the Financial Risk Management (FRM) Officer in the proposed changes raises serious concerns about conflicts of interest. The FRM Officer's dual responsibilities could impair their ability to make impartial decisions that prioritize the overall health of the market. The potential for conflicts of interest undermines the confidence that market participants place in the regulatory and supervisory mechanisms designed to safeguard market integrity. The SEC's decision to reject the OCC's proposal underscores the importance of robust risk mitigation strategies and the necessity of avoiding conflicts of interest in key regulatory roles. These principles are vital for protecting investors and maintaining a fair and orderly market. By upholding these standards, the SEC ensures that the regulatory framework continues to promote a safe, transparent, and efficient market environment. In conclusion, I fully support the SEC's decision to disapprove the OCC's proposed rule change. This decision reflects a commitment to transparency, risk mitigation, and investor protection—principles that are essential for the long-term stability and fairness of our financial markets. I encourage the SEC to continue its vigilant oversight to preserve the integrity of our market system. Thank you for considering my comments. I appreciate the Commission's efforts to safeguard the interests of investors and the stability of our financial markets. Sincerely, William Dominguez