The Federal Reserve and several large firms across the industry voiced strong concerns almost 40 years ago about the safety and soundness of the existing processes for clearing and settling U.S. government securities, including the risks associated with the failure of a few major firms, the inefficiencies of manual paper processing of trade confirmations, and bilateral trade-for-trade settlement. In response, the Government Securities Clearing Corporation (GSCC) was established in 1986 by National Securities Clearing Corporation (NSCC) as an industry utility to provide for the clearing and settlement of U.S. government securities.
Like the role NSCC plays in the equities market, GSCC compared transactions and acted as the counterparty for settlement purposes for each net position.
This served an important role to maintain the liquidity and integrity of the market for U.S. government securities. From inception through 2002, GSCC cleared about $1.6 trillion a day in trades involving U.S. Government securities.
FICC was created in 2003 to give DTCC customers a consolidated, common approach to fixed income transaction processing by integrating the GSCC and the Mortgage-Backed Securities Clearing Corporation (MBSCC). FICC would continue the same services that GSCC and MBSCC provided, but through separate divisions: GSD and Mortgage-Backed Securities Division.
After the 2008 financial crisis, FICC was designated as “systemically important,” pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). FICC is regulated by the U.S. Securities and Exchange Commission, and, under Dodd-Frank, is overseen by the Board of Governors of the Federal Reserve System.
The statements and other information available on and through this page, including information in any links and documents available on this page, is for informational purposes only. Please refer to the GSD Rules (available at:click here) for descriptions of the rules, procedures, and all rights, obligations, and other requirements of both FICC and its participants in connection with their use of GSD’s services. In the case of any discrepancy between the information available here and the GSD Rules, the GSD Rules govern.