Approval of FICC Rule Filing 2006-12—Assurances of financial responsibility and cease to act clarifications
The Securities and Exchange Commission has approved FICC rule filing 2006-12.This filing has amended FICC’s rules as follows:
Provisions have been added to the rules of both FICC Divisions to provide for actions that FICC may take to seek additional assurances from members in the event FICC is concerned about a member’s financial responsibility or operational capability.
The rules on ceasing to act and insolvency of the Government Securities Division (“GSD") of FICC have been harmonized with those of the National Securities Clearing Corporation (“NSCC”) and the Mortgage-Backed Securities Division of FICC. It should be noted that the circumstances under which the GSD will suspend a member or will deem a member insolvent have not changed.
A new term ("Cut-off Time") has been added to the rules of the GSD that: (i) is the equivalent of the existing term "Time of Insolvency" and (ii) applies in a non-insolvency situation where FICC determines to cease to act for a member.The rule provides that non-defaulting members will be given advance notice of the "Cut-off Time".
Questions regarding the rule filing should be addressed to the undersigned at (212) 855-7633.
