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FICC Forum Recap: Proposed Rule Changes, Client Road Map, Onboarding and Risk Management Updates

By DTCC Connection Staff | 4 minute read | May 2, 2024

DTCC’s Fixed Income Clearing Corporation (FICC) hosted a two-day virtual forum centered on U.S. Treasury Clearing, risk management updates and more. Catch the full video replays from both days below, along with highlights and links to resources.

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Proposed Rule Changes & What Lies Ahead

FICC’s Proposed Rule Changes

Two important rulebook changes that FICC put forward in March for the U.S. Securities and Exchange Commission (SEC) to consider and solicit public comments center around FICC’s Treasury Clearing access models and the requirements for customer protection, account segregation and broker-dealer protection. Market participants who want a better understanding of the rule changes should view the decks online about GSD Access Models and GSD Segregated Accounts and Margin. Two additional FICC rule changes will be filed in June, covering the mandate mechanisms: clearing agencies must mandate what members submit for clearing, and there must be rules for cash market and repo transactions.

Client Clearing Road Map: What’s Ahead

Navigating changes to the U.S. Treasury Market might seem daunting, but FICC has developed a Treasury Clearing Client Roadmap for clients and will continue to update the documentation on The roadmap is color-coded in accordance with different processes within FICC, and includes lanes about general topics, position separation, margin segregation and risk management.

  • The Capped Contingency Liquidity Facility (CCLF) Calculator, expected to be released at the end of May 2024, will provide insights into potential CCLF obligations by taking user-defined data inputs and passing them through the existing GSD CCLF logic to provide an estimated individual CCLF obligation.
  • The Value-at-Risk (VaR) Calculator, scheduled to be released at the end of June 2024, estimates margin requirements by allowing users to upload portfolios to produce a hypothetical VaR, the primary component of GSD’s Clearing Fund Requirement.
  • Also planned is a cloud-based client portal for accessing Government Securities Division (GSD) and Mortgage-Backed Securities Division (MBSD) risk reports.

Client Onboarding & Risk Management

New Member Onboarding

As the industry plans for the upcoming Treasury Clearing rules, FICC anticipates a significant ramp-up in new client onboarding. FICC has created the Multi-Stage Clearing Agency New Member Onboarding Outline to help streamline the process of using the Membership Application Portal and initiated onboarding enhancements to the MyDTCC portal, including:

  • Vetting Phase: Understand prospect’s intent to apply, provide transparency of the minimum financial requirements when a member.
  • Application Phase: Applicant would use DTCC Membership Application Portal to upload all relevant documentation in support of the Credit and Legal Reviews.
  • Credit and Legal Review: DTCC will complete a thorough Credit and Legal review of all documentation supplied by the applicant. Critical drivers of the length of Credit and Legal reviews, depend on the completeness of the documentation provided and speed of applicant responses on follow-up questions.
  • Client Set up and Testing: Applicant will work with DTCC’s Integration team to establish connectivity, set up the test environment and support testing for operational readiness.
  • Activation: After approval, DTCC’s Integration team will work with the applicant to establish an activation date and assist with production cutover.

There will also be a new integration with Global Legal Entity Identifier Foundation (GLEIF) to assist with validation of Legal Entity Identifier (LEI) ID and information. Members will also gain the ability to view statuses on all cases submitted, have unique user access to the application, DocuSign integration to streamline the execution of agreements, links to jurisdiction listings an additional tooling for activation processes.

FICC will work alongside firms applying to be members by helping with documentation uploads, providing walk-throughs on how to use the tool, and dedicated support from a member of the DTCC Integration team.

FICC Risk Management Updates

When it comes to risk management, FICC is full speed ahead. As shared on Day 1 of the Forum, some of the exciting developments for Risk Management include the launch of CCLF Calculator, progression of the VaR Calculator, APIs and the new client portal.

The Risk team went into more detail about the Calculators, sharing some of the questions they hope this tool can help members answer, such as, “What position is driving my VaR charge?”, “What would be a typical VaR charge for a transaction?”, “What is the VaR charge impact?” or “How much more margin will I need to post?” Further, it was shared that the new VaR Calculator will expand to FICC’s CME cross-margining program. The FICC Risk Management team anticipates that open-sourcing allows organizations to build their own calculator using the Clearing Fund Methodology Documentation.

The end of the presentation included some timeframes for FICC technology updates: the APIs, including VaR Calculator, are now available in the DTCC API Marketplace, and the public version of the VaR Calculator API and testing for the new client portal will both begin in June.

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