Subject: Comments on SR-OCC-2024-001 34-100009
From: Sagar Karandikar
Affiliation:

May 17, 2024

Dear SEC,
I am writing to express my concerns about SR-OCC-2024-001, titled
“Proposed Rule Change by The Options Clearing Corporation Concerning
Its Process for Adjusting Certain Parameters in Its Proprietary System
for Calculating Margin Requirements During Periods When the Products
It Clears and the Markets It Serves Experience High Volatility.”

I appreciate the opportunity to provide input on this matter. However,
I cannot support the approval of this proposal due to several reasons:

Lack of Transparency: The proposal contains significant redactions,
preventing meaningful public review and comment.

Systemic Risk: The OCC's proposal to reduce margin requirements for
Clearing Members poses increased risk to the stability of our
financial system. If clearing members cannot meet their financial
obligations - they must close their bets.

Conflict of Interest: The role of the Financial Risk Management
Officer has an inherent conflict of interest to oversee both the
well-being of Clearing Members as well as the agency itself.

Moral Hazard: The proposal shifts the costs of Clearing Member
defaults to the non-bank liquidity facility, creating a moral hazard
and perpetuating an unfair marketplace.

Inadequate Risk Management: The proposal fails to properly manage
liquidity risk and increases systemic risk, as evidenced by the OCC's
reliance on reducing margin requirements.

With note and appreciation to the rejection reasons as put forward by
the SEC in the dismissal of this rule:

Failure to promote prompt and accurate clearance and settlement of
securities transactions and safeguard securities and funds.

Lack of clear and direct lines of responsibility in governance arrangements.

Inadequate policies and procedures to cover credit exposures to
participants and insufficient margin calculation to cover potential
future exposure.

In conclusion, I support the SEC in their rejection of this proposed
rule change - to ensure the protection of all investors and the
integrity of our financial markets.

Thank you for considering my concerns and for your continued help to
protect our markets,

Sincerely,

Household investor.


--
Sagar
M.S. Computer Science