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FICC Publishes Timeline for Central Counterparty Benchmarks
To reach its goal of creating a central counterparty (CCP) that can begin early next year to net and settle pools of mortgages allocated for to-be-announced (TBA) mortgage-backed securities trades, DTCC’s Fixed Income Clearing Corporation (FICC) has issued a timeline for its customers that spells out pool netting test periods and document publication dates.
TBA trades make up the bulk of mortgage-backed securities transactions, and netting the pools of mortgages that are the results of the TBA trade allocation process is a key step in the creation of a CCP and the guaranteed settlement of the trades.
At the beginning of the timeline – in December 2007 – FICC issued specifications giving the message formats, flows and samples that allow its customers to begin planning for the submission of mortgage pools for netting. Testing of those message procedures is now underway.
New service description
Now FICC has published a new and more comprehensive service description that discusses additional CCP services and procedures that will result as part of pool netting. Included in the service description are settlement, pool substitution, risk management, fail tracking, member reporting and broader use of RTTM Web, FICC’s Internet-based Real-Time Trade Management service.
To help customers plan for the various steps and services that will make up the CCP pool netting project, FICC included the timeline in its service description.
For the complete text of the service description, go to www.dtcc.com, click Fixed Income under Clearance and Settlement on the dashboard, then go to User Documentation under Mortgage-Backed Securities. Scroll down to Participant Documentation to view the service description. @