May 14, 2024
Dear Chair Gensler, I am writing to express my strong support for the SEC's decision to reject the OCC's proposed rule change, SROCC-2024-001. This decision is crucial for maintaining the integrity, transparency, and stability of our financial markets. Firstly, the lack of transparency in the OCC's proposal is a significant concern. Transparency is foundational to market fairness, enabling investors to make informed decisions. The proposal's opaque nature would undermine investor confidence and obscure critical information necessary for risk assessment. Secondly, the proposed adjustments to margin requirements during periods of market volatility pose systemic risks. These adjustments could exacerbate market instability, leading to heightened volatility and potential market disruptions. It is imperative that any changes to margin requirements are designed to mitigate, not amplify, systemic risks. Furthermore, the conflict of interest inherent in the role of the FRM Officer is troubling. The dual responsibilities of managing margin requirements and overseeing risk management could lead to biased decision-making that prioritizes institutional interests over investor protection. In addition to these points, I am deeply concerned that the OCC's proposal is an attempt to avoid properly regulating its clearing members. Effective regulation involves ensuring that clearing members have robust risk management practices and sufficient capitalization to withstand periods of extreme volatility. The OCC should focus on proactive measures, such as rigorous stress testing and enhanced oversight, rather than seeking flexibility that may primarily serve its own operational convenience. By failing to enforce stringent regulations, the OCC is neglecting its responsibility to ensure market stability and protect investors. In conclusion, the SEC's disapproval of the OCC's proposed rule change is a necessary step in safeguarding the principles of transparency, risk mitigation, and investor protection. I commend the SEC for its commitment to maintaining a fair and stable financial market and urge continued vigilance in upholding these standards. Thank you for your attention to this matter. Sincerely, Robert Welch IV IT Project Manager US Food & Drug Administration (FDA) E-mail: rwelch379@gmail.com Mobile: (301) 919 - 0494