Subject: Comments on SR-OCC-2024-001 34-100009
From: Jonas Heymans
Affiliation:

May 17, 2024

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." 


While I appreciate the opportunity to provide input on this matter, I must oppose the approval of this proposal for the following reasons: Lack of Transparency: The proposal includes extensive redactions, hindering a meaningful public review and comment process. Systemic Risk: The OCC's suggestion to reduce margin requirements for Clearing Members introduces a heightened risk to the stability of our financial system. Clearing Members must be able to meet their financial obligations to avoid forced liquidation of their positions. Conflict of Interest: The Financial Risk Management Officer's dual role in overseeing both the well-being of Clearing Members and the agency itself presents a significant conflict of interest. Moral Hazard: Shifting the costs of Clearing Member defaults to the non-bank liquidity facility creates a moral hazard and contributes to an unfair marketplace. Inadequate Risk Management: The proposal inadequately addresses liquidity risk and increases systemic risk, as evidenced by the OCC's strategy of reducing margin requirements. 


Reflecting on the reasons provided by the SEC for rejecting this rule: Failure to Promote Prompt and Accurate Clearance and Settlement: The proposal does not ensure the prompt and accurate clearance and settlement of securities transactions, nor does it safeguard securities and funds. Lack of Clear Governance Arrangements: The proposal fails to establish clear and direct lines of responsibility in governance arrangements. Inadequate Policies and Procedures: There are insufficient policies and procedures to cover credit exposures to participants and inadequate margin calculation to cover potential future exposure. 


In conclusion, I support the SEC's 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 efforts to protect our markets. 

Sincerely, 
Jonas Heymans 
Household Investor