Notice2025-10531
Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of Proposed Rule Change as Modified by Amendment No. 1, Concerning the Collection of Intraday Margin
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 111 (Wednesday, June 11, 2025)</title>
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[Federal Register Volume 90, Number 111 (Wednesday, June 11, 2025)]
[Notices]
[Pages 24692-24696]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-10531]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103201; File No. SR-FICC-2025-008]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change as Modified by Amendment No. 1,
Concerning the Collection of Intraday Margin
June 5, 2025.
I. Introduction
On April 15, 2025, Fixed Income Clearing Corporation (``FICC,'' a
subsidiary of The Depository Trust & Clearing Corporation (``DTCC'')
and a ``Clearing Agency''), filed with the Securities and Exchange
Commission (``Commission'') proposed rule change SR-FICC-2025-008,
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder.\2\ The proposed rule change
would modify FICC's Government Securities Division (``GSD'') Rule Book
and Mortgage-Backed Securities Division (``MBSD'') Clearing Rules
concerning the collection of intraday margin. The Proposed Rule Change
was published for comment in the Federal Register on April 25, 2025.\3\
The Commission has received no comments on the changes proposed.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 102894 (Apr. 21,
2025), 90 FR 17486 (Apr. 25, 2025) (File No. SR-FICC-2025-008)
(``Notice of Filing'').
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On May 9, 2025, FICC filed Partial Amendment No. 1 to the proposed
rule change to provide supplemental information to assist the
Commission in its analysis of the proposed rule change.\4\ Amendment
No. 1 does not substantively alter the proposed rule change. The
proposed rule change, as modified by Amendment No. 1, are hereinafter
referred to as the ``Proposed Rule Change.'' The Commission is
publishing this notice to solicit comments on Amendment No. 1 from
interested persons, and, for the reasons discussed below, the
Commission is approving the Proposed Rule Change on an accelerated
basis.
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\4\ Amendment No. 1 consists of FICC's Market Risk Management
Procedures, filed as a confidential Exhibit 3 to the proposed rule
change, describing in greater detail how FICC would implement the
proposed rule change. FICC has requested confidential treatment of
Exhibit 3, pursuant to 17 CFR 240.24b-2.
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II. Background
A. Recent Amendments to Covered Clearing Agency Margin Requirements
On October 25, 2024, the Commission adopted amendments to 17 CFR
240.17ad-22(e)(6)(ii) (``Rule 17Ad-22(e)(6)(ii)'') in the Covered
Clearing Agency Standards (``CCA Standards'') under the Act to add new
requirements related to the monitoring and collection of intraday
margin by a Covered Clearing Agency (``CCA'').\5\ Specifically, the
Commission amended Rule 17ad-22(e)(6)(ii) to establish new requirements
with respect to a CCA's policies and procedures regarding the
collection of intraday margin to: (i) include a new requirement to
monitor intraday exposures on an ongoing basis; (ii) modify the pre-
existing reference to making intraday calls ``in defined
circumstances'' to making intraday calls ``as frequently as
circumstances warrant'' and identifying examples of such circumstances;
and, (iii) require that a CCA document when it determines not to make
an intraday margin call pursuant to its written policies and
procedures. FICC represents that its Proposed Rule Change is primarily
designed to ensure compliance with these new requirements.
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\5\ See Covered Clearing Agency Resilience and Recovery and
Orderly Wind-Down Plans, Exchange Act Release No. 101446 (Oct. 25,
2024), 89 FR 91000 (Nov. 18, 2024) (hereinafter, ``CCAS Margin
Rules'').
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B. Overview of FICC's Margin Methodology
FICC acts through its subsidiaries, the Government Securities
Division (``GSD'') and Mortgage-Backed Securities Division (``MBSD''),
as a central counterparty (``CCP'') and to provide clearance and
settlement services for fixed income transactions. As a CCP, FICC
interposes itself as the buyer to every seller and the seller to every
buyer for the transactions it clears. In doing so, FICC is exposed to
the risk that one or more of its members may fail to make a payment or
deliver securities.
A key tool FICC uses to manage this credit exposure to its members
is determining and collecting the Required Fund Deposit (i.e., margin)
from each member at least twice daily at GSD and at least once daily at
MBSD. At GSD, each Member is also responsible for the Clearing Fund
obligations arising from the activity of the Member's indirect
participant customers submitted to FICC via the Sponsored Service and/
or the Agent Clearing Service.\6\ The objective
[[Page 24693]]
of a member's Required Fund Deposit is to mitigate potential losses to
FICC associated with liquidating a member's portfolio in the event FICC
ceases to act for that member (hereinafter referred to as a
``default''). The aggregate amount of all margin payments constitutes
the separate GSD and MBSD Clearing Funds (each, a ``Clearing
Fund'').\7\ FICC would access the Clearing Fund should a defaulting
member's own Required Fund Deposit be insufficient to satisfy losses to
FICC caused by the liquidation of that member's portfolio.\8\ Each
member's margin consists of several components, each of which is
calculated to address specific risks FICC faces based on that member's
trading activity and unsettled positions.\9\
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\6\ FICC's Sponsored Service permits GSD members that are
approved to be Sponsoring Members, to sponsor certain institutional
firms, referred to as ``Sponsored Members,'' into GSD membership.
FICC establishes and maintains a ``Sponsoring Member Omnibus
Account'' on its books in which it records the transactions of the
Sponsoring Member's Sponsored Members. Similarly, FICC's Agent
Clearing Service permits GSD members that are approved to be Agent
Clearing Members to submit activities of certain institutional
firms, referred to as ``Executing Firm Customers,'' into FICC for
clearing and settlement. FICC establishes and maintains an ``Agent
Clearing Member Omnibus Account'' on its books in which it records
the transactions of the Agent Clearing Member's Executing Firm
Customers. See GSD Rulebook, Rule 1 (definitions of ``Agent Clearing
Transactions'' and ``Sponsored Member Trades''); Rule 3A (Sponsoring
Members and Sponsored Members); and Margin Component Schedule,
Section 1--Overview, infra, note 7.
\7\ Capitalized terms not defined herein have the meaning
assigned in FICC's GSD Rulebook and/or MBSD Clearing Rules,
available at <a href="http://www.dtcc.com/legal/rules-and-procedures">www.dtcc.com/legal/rules-and-procedures</a>.
\8\ See Notice of Filing, 90 FR 17487, supra, note 3.
\9\ See MBSD Clearing Rules, Rule 4 (Clearing Fund and Loss
Allocation), Section 2 (Required Fund Deposit Requirements); and,
GSD Margin Component Schedule, Section 2 (Required Fund Deposit
Calculations), supra, note 7.
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C. FICC's Current Intraday Margin Rules
Both GSD and MBSD currently have the authority and operational
capacity to make intraday margin calls, based on established
calculations and thresholds used to trigger the potential collection of
such margin. GSD currently administers the Intraday Supplemental Fund
Deposit and Intraday Backtesting Charge.\10\ The Intraday Supplemental
Fund Deposit is an additional charge added to the member's Required
Fund Deposit due to the amount of the intraday VaR charge based upon
the open positions of the member's portfolio. The Intraday Backtesting
Charge is an additional charge added to a member's Required Fund
Deposit intraday due to settlement risks that may not be adequately
captured by FICC's portfolio volatility model.\11\ MBSD currently
administers the Intraday VaR Charge and the Intraday Mark-to-Market
Charge. The Intraday VaR Charge applies if the difference between a
member's most recently collected VaR charge and their intraday VaR
calculations exceeds a certain percentage and dollar amount threshold.
The Intraday Mark-to-Market is collected to mitigate FICC's exposure
due to intraday changes in the size, composition and constituent
security prices of a member's portfolio.\12\ In addition, FICC
currently reserves the right to require a member or members generally
to make additional Intraday Supplemental Fund Deposits, Intraday Mark-
to-Market Charges, or Intraday VaR Charges, as applicable, if FICC
determines it to be necessary to protect itself and its members in
response to factors such as market conditions or financial or
operational capabilities affecting a member or members generally.\13\
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\10\ FICC has recently filed for Commission approval a proposed
rule change to institute an Intraday Mark-to-Market Charge at GSD.
See Exchange Act Release No. 102705, (Mar. 21, 2025), 90 FR 13965
(Mar. 27, 2025) (File No. SR-FICC-2025-005).
\11\ See GSD Rule 4 (Clearing Fund and Loss Allocation) and
Section 5 of Margin Component Schedule (definitions of Intraday
Supplemental Fund Deposit and Backtesting Charge), supra, note 7.
\12\ See MBSD Rules 1 (definitions of Intraday VaR Charge and
Intraday Mark-to-Market Charge) and 4 (Clearing Fund and Loss
Allocation), Id.
\13\ See MBSD Rule 4, Section 3a (Calculation of Intraday VaR
Charge and Intraday Mark-to-Market Charge); GSD Margin Component
Schedule (definition of Intraday Supplemental Fund Deposit), Id.
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FICC currently monitors intraday market moves and positions and
reviews intraday snapshots of each members' portfolio to determine
whether the member has experienced an adverse risk exposure that
warrants FICC assessing an intraday margin.\14\ FICC generally conducts
intraday monitoring every 15 minutes at GSD and hourly at MBSD,\15\
unless extended by FICC to address operational or other delays.\16\
Intraday Supplemental Fund Deposits for GSD and Intraday VaR Charges
and Intraday Mark-to-Market Charges for MBSD are due within a timeframe
specified by FICC.\17\
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\14\ See Notice of Filing, 90 FR at 17488, supra, note 3.
\15\ FICC expects to increase the frequency of its intraday
monitoring at MBSD from hourly to 15-minute increments during fourth
quarter of 2025. See Notice of Filing, 79 FR at 17488, supra note 3.
\16\ For GSD, intraday monitoring is conducted between 8:00 a.m.
and 4:30 p.m. (all times Eastern). For MBSD, intraday monitoring is
conducted from 8:00 a.m. to 4:00 p.m. On the last Business Day of
each calendar month, the intraday monitoring at GSD is extended from
4:30 p.m. (Eastern) to 5:00 p.m. See Notice of Filing, 79 FR at
17488, supra note 3.
\17\ See GSD Rule 1 and GSD Margin Component Schedule
(definition of Intraday Supplemental Fund Deposit and related
provisions); See also MBSD Rule 1 (Definitions) and MBSD Rule 4
(Clearing Fund and Loss Allocation), supra note 7.
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III. Description of the Proposed Rule Change
FICC proposes to amend both its GSD and MBSD rules concerning the
ongoing monitoring, calculation, and collection of intraday margin to
ensure compliance with the newly adopted CCAS Margin Rules.\18\
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\18\ See CCAS Margin Rules, supra, note 5.
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GSD
First, in Section 1 of the Margin Component Schedule, FICC proposes
to clarify that FICC may collect intraday margin ``as frequently as
circumstances warrant'' by requiring each Netting Member, as well as
each Netting Member who maintains a Segregated Indirect Participants
Account, to deposit with FICC an amount equal to the sum of all
applicable Required Fund Deposit Portions more frequently than the
current twice daily calls if FICC deems it appropriate. Further, in
Section 5 of the Margin Component Schedule, FICC amends the definition
of Intraday Supplemental Fund Deposit to note that FICC may re-
calculate the amount of VaR charge applicable to Members and Segregated
Indirect Participants at the times and frequencies established by FICC,
which shall be communicated on FICC's public website.
Next, the Proposed Rule Change amends the definition of ``Intraday
Supplemental Fund Deposit'' to outline that FICC shall establish
procedures for ongoing monitoring of intraday exposures and collection
of an amount calculated in respect of a Member's or Segregated Indirect
Participant's Intraday Supplemental Fund Deposit. The Proposed Rule
Change also states that the parameters, payment form, and time shall be
communicated to Members and Segregated Indirect Participants on FICC's
public website.
Also, the Proposed Rule Change will add language stating that a
Member or Segregated Indirect Participant shall be required to make an
Intraday Supplemental Fund Deposit when certain risk thresholds are
breached or when the products cleared or markets served display
elevated volatility. Examples given of elevated volatility within the
Proposed Rule Change include, but are not limited to, the occurrence of
sudden swings in U.S. Treasury yields outside of historically observed
market moves and/or conditions contributing to intraday risk exposures
to FICC that, in aggregate, materially exceed intraday risk
[[Page 24694]]
exposures observed under normal market conditions.
Finally, FICC proposes to amend the definition of Intraday
Supplemental Fund Deposit to clarify that FICC maintains discretion to
waive or reduce the amount of such payment. Specifically, FICC may
determine not to collect an Intraday Supplemental Fund Deposit, or may
decrease the amount, in circumstances where FICC determines that the
volatility-based intraday exposure of the members and/or the breaches
of the threshold amount do not accurately reflect FICC's risk exposure
to the member. Examples given in the new language with respect to this
determination may include, but are not limited to: (i) changes in
portfolio composition result in the threshold amount not being breached
on a consistent or persistent basis; (ii) trades that will be offset by
trades submitted later in the day; (iii) the threshold amount was
breached due to the submission of erroneous trades that are being
corrected; or (iv) the threshold amount was breached due to erroneous
data inputs.
Further, the Proposed Rule Change adopts new rules stating that
FICC may waive the collection of an Intraday Supplemental Fund Deposit
at GSD in exigent circumstances. FICC may determine to waive collection
if it determines: (i) that such a waiver is necessary to protect FICC,
its participants, investors and the public interest; or (ii) FICC can
effectively address the risk exposure presented by the Member or
Segregated Indirect Participant without the collection of the Intraday
Supplemental Fund Deposit.
The Proposed Rule Change would also require FICC to document and
review when a determination is made to waive, reduce, or determine not
to collect an Intraday Supplemental Fund Deposit pursuant to FICC's
procedures. FICC's Market Risk Management team monitors members'
trading activity and exposures and identifies accounts that exceed
certain preestablished thresholds. These threshold breaches trigger
research, review and escalation actions for recommendations for
waiving, reducing, and/or determining not to collect an Intraday
Supplemental Fund Deposit. If a waiver, reduction, and/or determination
not to collect an Intraday Supplemental Fund Deposit is recommended,
this recommendation is escalated to designated members of FICC's Market
Risk Management team for approval and documentation in accordance with
specified escalation procedures.\19\
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\19\ See Notice of Filing, 79 FR at 17489, supra note 3.
Confidential exhibit 3 provides more detail on this process of
waiver and documentation, supra note 4.
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MBSD
First, in Section 3a of Rule 4 of the MBSD Clearing Rules, FICC
proposes to clarify that FICC may collect intraday margin ``as
frequently as circumstances warrant'' by requiring each Clearing Member
to deposit with FICC the amount of the Intraday VaR Charge or the
Intraday Mark-to-Market Charge, as applicable, more frequently than the
current once daily calls if FICC deems it appropriate. Further, the
Proposed Rule Change provides that FICC may re-calculate the Intraday
VaR or Mark-to-Market Charge at the times and frequencies established
by FICC, which shall be communicated on FICC's public website.
Second, the Proposed Rule Change amends Section 3a of Rule 4 to
provide that FICC shall establish procedures for the ongoing monitoring
and collection of an amount calculated in respect of a Clearing
Member's Intraday VaR and Intraday Mark-to-Market Charge. The Proposed
Rule Change also states that the parameters, as well as the payment
form and time, shall be communicated to Clearing Members on FICC's
public website.
The Proposed Rule Change amends Section 3a of Rule 4 to add
language stating that a member shall be required to make an additional
payment to its Required Fund Deposit when certain risk thresholds are
breached or when the products cleared or markets served display
elevated volatility. Examples of elevated volatility include, but are
not limited to, the occurrence of sudden swings in mortgage-backed
security spreads outside of historically observed market moves and/or
conditions contributing to intraday risk exposures to FICC that, in
aggregate materially exceed intraday risk exposures observed under
normal market conditions.
Finally, FICC proposes to amend the definition of Intraday VaR
Charge in Rule 1 \20\ of the MBSD Clearing Rules to provide that FICC
may determine not to collect or may decrease the amount of the Intraday
VaR Charge in circumstances where FICC determines that the volatility-
based intraday exposure of the member and/or the breaches of the
threshold amount do not accurately reflect FICC's risk exposure to the
member. Examples given that FICC may consider when making such a
determination include, but are not limited to: (i) changes in portfolio
composition result in the threshold amount not being breached on a
consistent or persistent basis; (ii) trades that will be offset by
trades submitted later in the day; (iii) the threshold amount was
breached due to the submission of erroneous trades that are being
corrected; or (iv) the threshold amount was breached due to erroneous
data inputs.
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\20\ The Proposed Rule Change also amends Rule 1 to correct the
definition of Intraday Mark-to-Market by deleting the reference to
``subsection (d)'' therein and replacing it with ``subsection (c).''
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The Proposed Rule Change also adopts new rules stating that FICC
may waive the collection of an Intraday VaR Charge in exigent
circumstances. FICC may determine to waive collection if it determines:
(i) that such a waiver is necessary to protect FICC, its participants,
investors and the public interest; or (ii) FICC can effectively address
the risk exposure presented by the Member or Segregated Indirect
Participant without the collection of the Intraday VaR Charge.
The Proposed Rule Change also clarifies that FICC is adding
language to the definitions of Intraday Mark-to-Market Charge and
Intraday VaR Charge to comply with the new requirements of the CCAS
Margin Rules that any waiver, change, or determination not to collect
an Intraday Mark-to-Market or Intraday VaR Charge, as applicable, shall
be approved, documented and reviewed on a regular basis pursuant to
FICC's procedures. As with GSD, FICC's Market Risk Management team
monitors members' trading activity and exposures and identifies
accounts that exceed certain preestablished thresholds. These threshold
breaches trigger research, review and escalation actions for
recommendations for waiving, reducing, and/or determining not to
collect an Intraday Supplemental Fund Deposit. If a waiver, reduction,
and/or determination not to collect an Intraday Supplemental Fund
Deposit is recommended, this recommendation is escalated to designated
members of FICC's Market Risk Management team for approval and
documentation in accordance with specified escalation procedures.\21\
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\21\ Id.
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IV. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \22\ directs the Commission to
approve a proposed rule change of a self-regulatory organization if it
finds that such proposed rule change is consistent with the
requirements of the Exchange
[[Page 24695]]
Act and the rules and regulations thereunder applicable to such
organization. After carefully considering the Proposed Rule Change, the
Commission finds that the proposal is consistent with the requirements
of the Exchange Act and the rules and regulations thereunder applicable
to FICC. More specifically, the Commission finds that the proposal is
consistent with Section17A(b)(3)(F) of the Exchange Act,\23\ and Rules
17Ad-22(e)(6)(ii) and 17Ad-22(e)(23) \24\ under the Act.
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\22\ 15 U.S.C. 78s(b)(2)(C).
\23\ 15 U.S.C. 78q-1(b)(3)(E) and 15 U.S.C. 78q-1(b)(3)(F).
\24\ 17 CFR 240.17ad-22(e)(4)(i), 17 CFR 240.17ad-22(e)(6), 17
CFR 240.17ad-22(e)(6)(ii), 17 CFR 240.17ad-22(e)(23).
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A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act requires, in part, that the rules
of a registered clearing agency be designed to promote the prompt and
accurate clearance and settlement of securities transactions, and
assure the safeguarding of securities and funds which are in their
custody or control or for which they are responsible.\25\ The Proposed
Rule Change is consistent with Section 17A(b)(3)(F) of the Act for the
reasons discussed below.
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\25\ 15 U.S.C. 78q-1(b)(3)(F).
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As described in Section III above, FICC proposes to provide
additional detail in its Rules regarding the ongoing monitoring,
calculation, and collection of intraday margin. Specifically, the
Proposed Rule Change provides for ongoing monitoring of a member's
intraday Clearing Fund requirements, and for the collection of intraday
margin when certain risk thresholds are breached. The Proposed Rule
Change also specifies when FICC considers market conditions to exhibit
elevated volatility \26\ and how FICC may increase intraday Clearing
Fund requirements in response. It also further clarifies the
application of the Intraday Supplemental Fund Deposit to Segregated
Indirect Participants. The Proposed Rule Change should help members and
applicants to be more aware of the applicable intraday margin
responsibilities and thereby help to ensure the prompt and accurate
clearance and settlement of securities transactions. The added details
around FICC's intraday margin processes should help members and
indirect participants better understand their potential intraday margin
obligations to FICC, thereby enabling them to plan for and meet their
obligations when due.
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\26\ Examples given of elevated volatility include, but are not
limited to, sudden swings in U.S. Treasury yields or mortgage-backed
security spreads outside of historically observed market moves and/
or conditions. contributing to intraday risk exposures to FICC that,
in aggregate, materially exceed intraday risk exposures observed
under normal market conditions. See Notice of Filing, 90 FR at
17488, supra note 3.
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Additionally, FICC proposes new authority to lower risk thresholds
for individual members in certain circumstances and proposes new FICC
requirements that any reduction or determination not to collect
intraday margin, or any waiver of an intraday charge must be approved,
documented, and reviewed on a regular basis. These proposed changes
should help FICC collect sufficient margin to cover its intraday
exposures to its members and indirect participants.
As FICC uses the margin it collects to mitigate potential losses to
FICC (and its members) associated with liquidating a defaulting
member's portfolio, FICC's ability to collect sufficient margin should
help ensure FICC is able to continue to effect the prompt and accurate
clearance and settlement of securities transactions despite a member
default. Furthermore, in the event a defaulting member's margin proved
insufficient, NSCC would mutualize the remaining losses to non-
defaulting members by accessing the Clearing Fund. Therefore, by
increasing the likelihood NSCC collects sufficient margin from each
member the Proposed Rule Change should help FICC assure the
safeguarding of securities and funds which are in its custody or
control and, in general, to protect investors and the public interest.
Accordingly, for the reasons discussed above, the Proposed Rule
Change is consistent with the requirements of Section 17A(b)(3)(F) of
Act.\27\
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\27\ Id.
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B. Consistency With Rule 17ad-22(e)(6)(ii)
Rule 17Ad-22(e)(6)(ii) requires a CCA, such as FICC, to establish,
implement, maintain, and enforce written policies and procedures
reasonably designed to cover its credit exposure to its participants by
establishing a risk-based margin system that, at a minimum: (A) marks
participant positions to market and collects margin at least daily; (B)
monitors intraday exposure on an ongoing basis; (C) includes the
authority and operational capacity to make intraday margin calls as
frequently as circumstances warrant, including (1) when risk thresholds
specified by the CCA are breached, and (2) when the products cleared or
markets served display elevated volatility; and (D) documents when the
CCA determines not to make an intraday call pursuant to its written
policies and procedures.\28\ For the following reasons, the Proposed
Rule Change is consistent with Rule 17ad-22(e)(6)(ii).\29\
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\28\ 17 CFR 240.17Ad-22(e)(6)(ii).
\29\ Id.
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As described in Section II and III above, both GSD and MBSD
currently have the authority and operational capacity to make intraday
margin calls.\30\ While FICC currently monitors its intraday exposures,
FICC proposes to explicitly state in its Rules its obligation to
monitor its intraday exposures on an ongoing basis, which FICC
represents it currently does in 15 minute intervals at GSD and hourly
at MBSD, with a stated intention to shorten the intervals to 15 minutes
by the end of 2025.\31\ Also, FICC proposes to clarify in its rules
that it has the authority and operational capacity to collect intraday
margin as frequently as circumstances warrant. Moreover, while FICC
currently has established risk thresholds which can be lowered in
volatile market conditions, FICC is providing additional details in its
Rules addressing its process for determining whether to charge intraday
margin and when it considers markets to display elevated volatility.
The Proposed Rule Change also describes examples of elevated volatility
which may alter intraday margin thresholds. The Proposed Rule Change
also describes circumstances wherein FICC may determine not to collect
or waive an intraday margin call. Finally, FICC proposes new
requirements that any reduction, waiver, or determination not to
collect intraday margin must be approved, documented and reviewed on a
regular basis.
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\30\ See note 16, supra.
\31\ See Notice of Filing, supra note 3, at 17488.
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Based on the foregoing, the Proposed Rule Change is consistent with
the requirements for Rule 17Ad-22(e)(6)(ii).
C. Consistency With Rule 17Ad-22(e)(23)
Rule 17Ad-22(e)(23)(ii) \32\ under the Act requires each CCA to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to, among other things, provide
sufficient information to enable participants to identify and evaluate
the risks, fees, and other material costs they incur by participating
in the CCA. Based on the reasons described below, the Proposed
[[Page 24696]]
Rule Change is consistent with the requirements of Rule 17Ad-
22(e)(23)(ii).
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\32\ 17 CFR 240.17Ad-22(e)(23)(ii).
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As described in Section III.A above, FICC proposes to clarify its
processes for monitoring, calculating, and determining whether to
collect intraday margin. FICC proposes to add a requirement that it
will post its intraday risk monitoring times and frequencies on its
public website. By doing so, FICC's Rules should support the
communication of information that its members may use to identify and
evaluate potential intraday Required Fund Deposits resulting from
FICC's processes. As such, the Proposed Rule Change is consistent with
providing sufficient information to enable participants to identify and
evaluate the risks, fees and other material costs incurred with
participation in the CCA. Thus, the Proposed Rule Change is consistent
with the requirements of Rule 17Ad-22(e)(23)(i) and (ii) under the
Act.\33\
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\33\ Id.
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V. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning whether Partial Amendment No. 1 is consistent with
the Act. Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5321263f367e303c3e3e363d2720132036307d343c25"><span class="__cf_email__" data-cfemail="9defe8f1f8b0fef2f0f0f8f3e9eeddeef8feb3faf2eb">[email protected]</span></a>. Please include
file number SR-FICC-2025-008 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549.
All submissions should refer to file number SR-FICC-2025-008. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available for inspection and copying
at the principal offices of FICC and on DTCC's website (<a href="https://www.dtcc.com/legal/sec-rule-filings.aspx">https://www.dtcc.com/legal/sec-rule-filings.aspx</a>). Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to File Number SR-FICC-2025-008 and should be submitted on or
before July 2, 2025.
VI. Accelerated Approval of the Proposed Rule Change, as Modified by
Partial Amendment No. 1
The Commission finds good cause, pursuant to Section
19(b)(2)(C)(iii) of the Act,\34\ to approve the Proposed Rule Changes,
as modified by Partial Amendment No. 1, prior to the thirtieth day
after the date of publication of Partial Amendment No. 1 in the Federal
Register. As noted above, FICC filed Exhibit 3 \35\ to provide FICC's
Market Risk Management Procedures, which provides supplemental
information to assist the Commission in its analysis of the Proposed
Rule Change. Partial Amendment No. 1 neither modifies the Proposed Rule
Change as originally published in any substantive manner, nor does
Partial Amendment No. 1 affect any rights or obligations of the FICC or
their members and participants. Rather, Partial Amendment No. 1
includes the policies and procedures that FICC follows in implementing
their margin rules, including those aspects of its margin rules
affected by the proposed rule changes. Additionally, since FICC filed
Partial Amendment No. 1 on May 9, 2025, the Commission has had
sufficient time to review and consider Partial Amendment No. 1 as part
of its analysis of the Proposed Rule Change. Accordingly, the
Commission finds good cause, pursuant to Section 19(b)(2)(C)(iii) of
the Act,\36\ to approve the Proposed Rule Change, as modified by
Partial Amendment No. 1, prior to the thirtieth day after the date of
publication of notice of Partial Amendment No. 1 in the Federal
Register.
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\34\ 15 U.S.C. 78s(b)(2)(C)(iii).
\35\ See note 4, supra.
\36\ 15 U.S.C. 78q-1.
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VII. Conclusion
On the basis of the foregoing, the Commission finds that the
Proposed Rule Change is consistent with the requirements of the Act and
in particular, Section 17A(b)(3)(F) of the Act, and Rules 17Ad-
22(e)(6)(ii) and 17Ad-22(e)(23) thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
that proposed rule change SR-FICC-2025-008 be, and hereby is,
approved.\37\
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\37\ In approving the Proposed Rule Change, the Commission
considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-10531 Filed 6-10-25; 8:45 am]
BILLING CODE 8011-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.