The US Securities and Exchange Commission (SEC) has approved the Fixed Income Clearing Corporation’s (FICC) rule filings linked to access models and segregated accounts and margin.
In relation to segregated accounts and margin, FICC’s proposed rule changes seek to address the Commission’s new requirements and the conditions for including margin in the broker-dealer reserve formulas.
The proposed rule change would provide for the separate and independent calculation, collection, and holding of margin for proprietary transactions of a netting member from margin submitted to FICC by a netting member to support the transactions of an indirect participant.
In addition, the rule change would establish segregated accounts for direct and indirect participants, including establishing a minimum $1 million cash margin requirement for each segregated indirect participant.
Elsewhere, the rule change seeks to consolidate the methodology for calculating the margin requirements.
Meanwhile, in relation to access models, FICC proposes to re-name, consolidate, and adopt additional provisions governing GSD’s existing correspondent clearing/prime broker services.
As part of the proposals, moving forward, the correspondent clearing/prime broker services would be referred to as the “Agent Clearing Service,” submitting members would be referred to as “Agent Clearing Members,” and executing firms would be referred to as “Executing Firm Customers.”
In a filing, FICC stated that it designed the proposed changes to the Agent Clearing Service to highlight the similarities between the Agent Clearing Service and other agent clearing models.
“We are pleased that the SEC took action to approve FICC’s rule filings related to access models and segregated accounts and margin. With these approvals, we are now ready to advance our implementation efforts with the industry, in preparation for next year’s deadlines,” DTCC said in a statement.
“We’re also appreciative of all of the comments and perspectives that the industry has shared with us on a range of matters, including default management, done away and porting. Additional work remains as we get ready for implementation, and we are committed to ensuring we deliver the best solutions with the best value for the industry.
“The expansion of US Treasury clearing is a significant industry-wide effort that promises to deliver critical benefits to the industry, including increased transparency and reduced risk. We will continue to work closely with our clients and key stakeholders on ensuring safe, smooth and successful implementations in 2025 and 2026.”