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FICC Expands Its Risk Management Arsenal

On February 1, NYPC announced that the Commodity Futures Trading Commission (CFTC) had granted it registration as a U.S. Derivatives Clearing Organization (DCO) pursuant to the Commodity Exchange Act. The CFTC’s approval represents a significant step towards bringing the unique capital and operational efficiencies of NYPC to global fixed income traders.

“NYPC’s DCO registration is an important milestone in the transformation of the U.S. derivatives market towards a more open and competitive structure,” said Walter Lukken, CEO of NYPC. “The innovative operational and capital efficiencies of NYPC’s cross-margining system will be a powerful catalyst for new competition in our industry while increasing transparency and mitigating systemic risk. We appreciate the significant time and consideration that the Commission has taken in granting this groundbreaking DCO registration.”

NYPC’s cross-margining arrangement with FICC is currently under review with the CFTC and the Securities and Exchange Commission. Pending regulatory approvals, NYPC expects to begin operations in late first quarter of 2011.