Notice2025-23938
Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change To Modify the GSD Rulebook Relating to a New Service Offering Called the ACS Triparty Service
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
December 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 246 (Tuesday, December 30, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 246 (Tuesday, December 30, 2025)]
[Notices]
[Pages 61200-61204]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23938]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104492; File No. SR-FICC-2025-021]
Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Order Approving Proposed Rule Change To Modify the GSD Rulebook
Relating to a New Service Offering Called the ACS Triparty Service
December 22, 2025.
I. Introduction
On September 19, 2025, Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
proposed rule change SR-FICC-2025-021, 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 \3\ (the ``Rules'') to create a
new service offering called the ACS Triparty Service. The Proposed Rule
Change was published for comment in the Federal Register on September
30, 2025.\4\ The Commission has received no comments on the changes
proposed.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The GSD Rules are available at https://www.dtcc.com/~/media/
Files/Downloads/legal/rules/ficc_gov_rules.pdf. Capitalized terms
not otherwise defined herein are defined in the GSD Rules.
\4\ See Securities Exchange Act Release No. 104084 (Sept. 26,
2025), 90 FR 47045 (Sept. 30, 2025) (File No. SR-FICC-2025-021)
(``Notice of Filing'').
---------------------------------------------------------------------------
On November 3, 2025, pursuant to Section 19(b)(2) of the Act,\5\
the Commission designated a longer period within which to approve,
disapprove, or institute proceedings to determine whether to approve or
disapprove the Proposed Rule Change.\6\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 104173 (Nov. 3,
2025), 90 FR 51424 (Nov. 17, 2025) (File No. SR-FICC-2025-021).
---------------------------------------------------------------------------
For the reasons discussed below, the Commission is approving the
Proposed Rule Change.
II. Background
FICC is a central counterparty (``CCP''), which means it interposes
itself as the buyer to every seller and seller to every buyer for the
financial transactions it clears. FICC's GSD provides trade comparison,
netting, risk management, settlement and CCP services for the U.S.
Government securities market.
A. FICC's Indirect Participant Access Models
In 2024, FICC consolidated its existing correspondent clearing and
prime broker services into a single ``Agent Clearing Service.'' \7\ The
new service allows certain Netting Members, known as ``Agent Clearing
Members,'' to submit any transaction calling for the delivery of
Eligible Securities with the exception of Netting Eligible Auction
Purchases, GCF Repo Transactions, and CCIT Transactions (each, an
``Agent Clearing Transaction'') to FICC for comparison, novation,
netting and settlement purposes.\8\ Each Agent Clearing Transaction is
entered into by an Indirect Participant (known as an ``Executing Firm
Customer'') with an Agent Clearing Member (a ``done-with''
transaction), or with a different Netting Member, or any Sponsored
Member or Executing Firm Customer of any Netting Member (``done-
away'').\9\ While the Agent Clearing Member acts solely as the agent of
the Executing Firm Customer, it remains fully liable to FICC for all
obligations associated with the Agent Clearing Transactions.\10\
---------------------------------------------------------------------------
\7\ Securities Exchange Act Release No. 101694 (Nov. 21, 2024),
89 FR 93784, 93798-99 (Nov. 27, 2024) (SR-FICC-2024-005).
\8\ See Rule 8, supra note 3.
\9\ See Notice of Filing, supra note 4 at 47045
\10\ See Rule 8, supra note 3.
---------------------------------------------------------------------------
FICC states that the Agent Clearing Service is designed to provide
an avenue of access to FICC's clearance and settlement systems for
indirect participants unable to onboard directly with FICC due to
regulatory, cost, legal, operational or jurisdictional reasons.\11\
Furthermore, Clearing Fund requirements for Agent Clearing Transactions
are ``calculated on a net basis across all Executing Firm Customers
whose transactions are recorded within the same Account,'' which
results in lower margin obligations than the GSD Sponsored Membership
Service (``Sponsored Service'').\12\
---------------------------------------------------------------------------
\11\ See Notice of Filing, supra note 4 at 47054.
\12\ See supra, note 13, at 97398-99.
---------------------------------------------------------------------------
The Agent Clearing Service allows Members to perfect their security
interests in an Agent Clearing Transactions without filing a financing
statement. According to an industry opinion obtained by SIFMA, the
level of intermediation present in the Service means a court would
treat Agent Clearing Transactions as ``financial assets'' in a
``securities account,'' with the Agent Clearing Member acting as the
``securities intermediary'' under New York's UCC Article 8. Under
Articles 8 and 9, this automatically perfects the securities
intermediary's interest and eliminates the need for the costly and
time-consuming filing of a financing statement.\13\ The Agent Clearing
Service and the Sponsored Service are the two principal Indirect
Participant access models offered by FICC. Under the Sponsored Service,
a Netting Member of FICC (the ``Sponsoring Member'') can sponsor its
customer (the ``Sponsored Member'') into limited membership and submit
certain transactions for comparison, novation, and netting conducted by
the Sponsored Member (``Sponsored Member Trades'').\14\ Both the Agent
Clearing Member and the Sponsoring Member function as the processing
agent for its Sponsored Members or Executing Firm Customers regarding
their trades and remains fully liable for the Sponsored Member or
Executing Firm Customer's obligations to FICC under these
transactions.\15\
---------------------------------------------------------------------------
\13\ See Notice of Filing, supra note 4, at 47045-46.
\14\ See Rule 3A, supra note 3.
\15\ See Rule 3A, Section 6, and Rule 8, Section 5, supra note
3.
---------------------------------------------------------------------------
While the Agent Clearing Service and Sponsored Service share
similarities including the ability of both to accommodate bilateral DVP
repos, there are specific differences in the scope of transactions
eligible for clearing, as discussed further in section II.B below, the
treatment of haircuts, and the novation of Start Legs.\16\ Current
Rules
[[Page 61201]]
governing the Agent Clearing Service do not address the treatment of
Initial Haircuts under Agent Clearing Transactions, whereas
transactions with Initial Haircuts in the Sponsored Service are
considered ``Off-The-Market Transactions.'' As for the novation of
Start Legs on Same-Day Settling Trades, unlike in the Sponsored Service
where FICC expressly does not novate the Start Leg of Sponsored Member
Trades, the Rules provide for FICC to novate the Start Leg of done-with
repo transactions submitted via the Agent Clearing Service.
---------------------------------------------------------------------------
\16\ The ``Start Leg,'' means the initial settlement aspects of
the Transaction, involving the transfer of the underlying Securities
by the funds borrower and the taking in of such Securities by the
funds lender. See Rule 1 (definition of ``Start Leg''), supra note
3.
---------------------------------------------------------------------------
B. FICC's Agent Clearing Service and Indirect Participant Triparty
Repos
The Agent Clearing Service does not currently support Repo
Transactions on securities represented by Generic CUSIP Numbers that
settle through a clearing agent bank's triparty repo platform
(``Triparty Trades''), whereas the Sponsored Service includes this type
of transaction.\17\ FICC clears Triparty Trades between a Sponsored
Member and its Sponsoring Member (``Sponsored GC Trades'') through its
Sponsored GC Service.\18\
---------------------------------------------------------------------------
\17\ See Notice of Filing, supra note 4, at 47046.
\18\ See Rule 1 (definition of ``Sponsored GC Service''), and
Rule 3A, supra note 3.
---------------------------------------------------------------------------
Under the Sponsored GC Service, the securities delivery and related
payment obligations in a Sponsored GC Trade settle directly between the
pre-novation counterparties through a Sponsored GC Clearing Agent
Bank's triparty repo platform, rather than through FICC.\19\ This can
facilitate access for participants that are not operationally equipped
to perform the collateral management and other functions associated
with Repo Transactions that settle through FICC on a delivery-versus-
payment basis (``DVP Repo Transactions''), or who generally prefer to
use the triparty repo market because a clearing bank administers
collateral management and other functions.\20\
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release Nos. 92808 (Aug. 30,
2021), 86 FR 49580-81 (Sept. 3, 2021) (SR-FICC-2021-003); and 92799
(Aug. 27, 2021), 86 FR 49387-88 (Sept. 2, 2021) (SR-FICC-2021-801).
\20\ Id.
---------------------------------------------------------------------------
III. Description of the Proposed Rule Change
The Proposed Rule Change would: (A) amend the FICC Government
Securities Division Rulebook to create the ACS Triparty Service as a
new offering under the Agent Clearing Service; (B) align the treatment
of Initial Haircuts within the Rules for done-with Agent Clearing
Transactions with those for done-with Sponsored Member Trades; (C)
clarify that FICC does not novate the Start Legs of Same-Day Settling
Done-With Agent Clearing Transactions; and (D) make certain conforming
and clarifying changes.\21\
---------------------------------------------------------------------------
\21\ The Proposed Rule Change edits the GSD Rulebook by adding
new several new definitions in Rule 1 editing several other
definitions in Rule 1, and making clarifying updates to Rules 3A and
5. The Proposed Rule Change also makes corresponding changes to
Sections 4 and 7 of Rule 8, adding new sections 7(c), (g), and (h).
The Proposed Rule Change also adds new Section 8 to Rule 8. In
addition, the Proposed Rule Change adds a new Schedule of ACS
Triparty Trade Timeframes to the Rulebook and adds corresponding
changes to the Schedule for the Deletion of Trade Data, the Schedule
of Required and Accepted Data Submission Items for a Substitution of
Existing Securities Collateral, and the Schedule of GC Comparable
Securities.
---------------------------------------------------------------------------
A. The ACS Triparty Service
The ACS Triparty Service would allow an Agent Clearing Member to
submit to FICC for comparison and novation triparty Repo Transactions
entered by an Executing Firm Customer using securities represented by
Generic CUSIP Numbers (each, an ``ACS Triparty Trade''). As with other
Agent Clearing Transactions, the Agent Clearing Member acts solely as
agent of the Executing Firm Customer in connection with the clearing of
Agent Clearing Transactions and remains fully liable to FICC for the
performance of all obligations, financial or otherwise, arising in
connection with these transactions. The Proposed Rule Change would
accommodate transactions between an Executing Firm Customer and its
Agent Clearing Member (done-with trades), as well as transactions
between an Executing Firm Customer and another Netting Member or an
Indirect Participant of any Netting Member (done-away trades).
FICC states that ACS Triparty Trades would be recorded in an Agent
Clearing Member Omnibus Account along with other Agent Clearing
Transactions, unless the Executing Firm Customer and Agent Clearing
Member choose to record such trades in a Segregated Indirect
Participants Account. If utilizing the Agent Clearing Member Omnibus
Account, margin on the transaction would be calculated in a way that
recognizes the risk offsets across all open positions within the
Account at the time. ACS Triparty Trades recorded in both an Agent
Clearing Member Omnibus Account or a Segregated Indirect Participants
Account would be subject to all applicable charges according to the
Margin Component Schedule of the Rules as other Agent Clearing
Transactions recorded in the same Account.\22\ ACS Triparty Trades
would be treated as GCF Repo Transactions for the calculation of
margin, therefore FICC does not propose any changes to the calculation
of the Required Fund Deposit or Segregated Customer Margin. FICC
further states that they would incorporate ACS Triparty Trades into
their liquidity risk management calculations and into the calculation
of Agent Clearing Members' obligations with respect to the Capped
Contingency Liquidity Facility (``CCLF'') \23\ in the same respect as
Sponsored GC Trades.\24\
---------------------------------------------------------------------------
\22\ In a separate Rule Filing, FICC submitted a Default
Management proposal which would amend Rule 8 to describe mechanisms
that would permit ACM to liquidate the positions of an Executing
Firm Customer. See Securities Exchange Act Release No. 103282 (June
17, 2025), 90 FR 26656 (June 23, 2025) (SR-FICC-2025-015). See also
Amendment No. 1 available at <a href="https://www.dtcc.com/-/media/Files/Downloads/legal/rule-filings/2025/FICC/SR-FICC-2025-015-Amendment-1.pdf">https://www.dtcc.com/-/media/Files/Downloads/legal/rule-filings/2025/FICC/SR-FICC-2025-015-Amendment-1.pdf</a>. FICC states that ACS Triparty Trades will be excluded from
the provisions of the Default Management Proposal. See Notice of
Filing, supra note 4, 90 FR 47045 at 47048.
\23\ See Rule 22A, Section 2a(b), supra note 3.
\24\ See Notice of Filing, supra note 4, at 47048.
---------------------------------------------------------------------------
The ACS Triparty Service will incorporate features from the extant
Sponsored GC Service resulting in similar terms across both the ACS
Triparty and Sponsored GC Service. FICC states that this similarity is
to align terms across both the ACS Triparty and Sponsored GC Services,
facilitating Agent Clearing Members in offering access to money market
funds and other cash providers dependent on securities transfers for
margin maintenance and triparty repo clearing banks for collateral
management to access FICC's clearance and settlement services.\25\
---------------------------------------------------------------------------
\25\ Id at 47047-8.
---------------------------------------------------------------------------
Both services will utilize identical schedules of eligible
securities. The Start Leg of transactions within both services will
settle on a gross basis between pre-novation counterparties via the
triparty repo platform of a triparty clearing agent bank. Upon settling
the Start Leg and satisfying other conditions, the End Leg becomes
eligible for novation. Additionally, both services may apply, but are
not required to apply, an initial haircut.
For purposes of calculating initial margin requirements, both
services will treat triparty repos as GCF Repo Transactions. The only
Funds-Only Settlement Amounts applicable will be the Forward Mark
Adjustment Payment and Interest Rate Adjustment Payment. Daily accrued
repo interest will be payable by or to FICC under both services.
Furthermore, both allow the repo seller to substitute General
[[Page 61202]]
Collateral Comparable Securities and/or cash for the purchased
securities subject to the triparty trade.
In connection with the final settlement, daily repo interest and
margin calls related to mark-to-market movements of the triparty repo
securities, as well as the transfer of these securities, will occur
directly between pre-novation counterparties through the triparty repo
platform of the clearing agent bank.\26\ FICC also proposes to
explicitly state within the Rules that an Agent Clearing Transaction
involving an Initial Haircut is considered an ``Off-the-Market
Transaction,'' akin to a Sponsored Member Trade with an Initial
Haircut.
---------------------------------------------------------------------------
\26\ Id at 47047.
---------------------------------------------------------------------------
B. The Treatment of Initial Haircuts for Done-With Agent Clearing
Transactions
As an Agent Clearing Member might post a haircut to its Executing
Firm Customers to address regulatory and/or investment guideline
concerns similar to Sponsoring Members and their Sponsored Members
under the Sponsored Service, or choose to collect a haircut from its
Executing Firm Customer at the Start Leg to mitigate exposure from full
liability for obligations to FICC in Agent Clearing Transactions.
However, FICC's current funds-only settlement process could frustrate
this purpose by requiring the recipient of a haircut at the Start Leg
to transfer an equivalent amount of cash the next Business Day after
the Start Leg has settled.
To prevent Initial Haircuts from being returned before final
settlement in done-with Agent Clearing Transactions, FICC proposes new
Rules to align the treatment of Initial Haircuts under Agent Clearing
Transactions with those under Sponsored Member Trades. Specifically,
the Collateral Mark for these transactions will be based on the Initial
Haircut rather than the Contract Price. For instance, if the Initial
Haircut is $2 and the value of Eligible Securities increases by $1,
FICC would calculate a Collateral Mark of $1 instead of $3. This
ensures the Initial Haircut remains with the intended party until final
settlement.
Additionally, FICC plans to clarify that ACS Triparty Trades, like
Sponsored GC Trades, may but are not required to include an Initial
Haircut. Changes in mark-to-market values of Purchased GC Repo
Securities for these trades will be passed between pre-Novation
counterparties through the triparty repo platform rather than the
Funds-Only Settlement Amount cycle, as in a Sponsored GC Trade.
Finally, FICC will specify that Agent Clearing Transactions with an
Initial Haircut will be treated as Off-the-Market Transactions, similar
to Sponsored Member Trades. The party posting the Initial Haircut bears
the risk of loss if FICC ceases to act for the pre-Novation
counterparty.
C. Rule Change To Clarify That FICC Does Not Novate the Start Legs of
Same-Day Settling Done-With Agent Clearing Transactions
FICC does not Novate the Start Legs of same-day starting Agent
Clearing Transactions due to operational and legal complexities.
Revisions to Rule 1 will make clear that only certain Agent Clearing
Transactions qualify as Same-Day Settling Trades. The only Agent
Clearing Transaction that constitutes a Same-Day Settling Trade is one
that: (1) is not an ACS Triparty Trade; (2) is executed between an
Executing Firm Customer and a Netting Member or Indirect Participant
other than its Agent Clearing Member; and (3) meets the requirements of
clause (i) and (ii) of that definition. This aligns the treatment of
these transactions with the Sponsored Service. Section 7(f) (formerly
7(e)) will also be updated to state that Same-Day Settling Trades do
not settle at FICC, eliminating the need for notices from Agent
Clearing Members.
D. Proposed Technical and Conforming Changes
Finally, FICC proposes several clarifying, conforming, and
technical changes related to the Proposed Rule Changes.
FICC intends to revise the definitions of ``Current Haircut,''
``Haircut Deficit,'' and ``Haircut Surplus'' to specify that these
definitions only apply to done-with DVP Repo Transactions. This
distinction is necessary because FICC does not support Initial Haircuts
for done-away DVP Repo Transactions, but only in the context of done-
with DVP Repo Transactions. Similarly, FICC aims to amend Section 9 of
Rule 3A to clarify that it incorporates Initial Haircuts into its
calculation of Funds-Only Settlement Amounts solely in relation to
done-with Sponsored Member Trades.
Additionally, FICC would update Section 4 of Rule 5 to mandate that
ACS Triparty Trades be submitted exactly as executed. Furthermore,
Section 7(h) of Rule 8 would be relocated as a new sentence at the end
of new Section 7(d).
FICC also proposes adding a new Section 7(c) to Rule 8, indicating
that ACS Triparty Trades are not subject to the Schedule of Timeframes
applicable to Agent Clearing Transactions in general, but rather to the
Schedule of ACS Triparty Trade Timeframes. Lastly, FICC proposes
renumbering Section 7(e) of Rule 8 as Section 7(f).
IV. Discussion and Commission Findings
Section 19(b)(2)(C) of the Act \27\ 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 Act and rules and regulations thereunder applicable
to such organization. After carefully considering the Proposed Rule
Change, the Commission finds that the Proposed Rule Change is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to FICC. In particular, the
Commission finds that the Proposed Rule Change is consistent with
Section 17A(b)(3)(F) of the Act \28\ and Rules 17ad-
22(e)(18)(iv)(C),\29\ 17ad-22(e)(19),\30\ and 17ad-22(e)(21),\31\ each
promulgated under the Act.
---------------------------------------------------------------------------
\27\ 15 U.S.C. 78s(b)(2)(C).
\28\ 15 U.S.C. 78q-1(b)(3)(F).
\29\ 17 CFR 240.17ad-22(e)(18)(iv)(C).
\30\ 17 CFR 240.17ad-22(e)(19).
\31\ 17 CFR 240.17ad-22(e)(21).
---------------------------------------------------------------------------
A. Consistency With Section 17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act \32\ requires the rules of a
clearing agency to, among other things, (i) promote the prompt and
accurate clearance and settlement of securities transactions; and (2)
protect investors and the public interest.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
As outlined in Section II.A, FICC's current Agent Clearing Service
supports trading in DVP repos but not triparty repos. The Commission
understands that this restriction may disadvantage certain market
participants due to regulatory, operational, legal, size, or other
constraints that limit their ability to access clearance and settlement
services for triparty repos.\33\ As discussed in part III.A, FICC
proposes to expand the Agent Clearing Service through the ACS Triparty
Service to accommodate triparty repo trading, where a clearing bank
administers collateral management and other functions. By allowing
Executing Firm Customers to participate in triparty repo transactions
through Agent Clearing Members on a done-with or done-away basis, the
proposed ACS Triparty Service would facilitate more triparty repo
trades being centrally cleared by FICC within the Agent Clearing
Service. Increasing the volume of centrally cleared trades by FICC
would promote
[[Page 61203]]
the prompt and accurate clearance and settlement of securities
transactions, as those typically conducted outside central clearing
would benefit from FICC's risk management and settlement guarantees.
---------------------------------------------------------------------------
\33\ See Notice of Filing, supra note 4, at 47054.
---------------------------------------------------------------------------
Furthermore, an ACS Triparty Trade would be risk managed through
FICC's existing margin methodology and liquidity risk management
methodology. Transactions are recorded in either an Agent Clearing
Member Omnibus Account or Segregated Indirect Participant Account. When
recorded in an Agent Clearing Member Omnibus Account, ACS Triparty
trades would be netted with other Agent Clearing Transactions,
resulting in a lower margin obligation.\34\ Those recorded in
Segregated Indirect Participant Accounts would not be netted against
the Agent Clearing Member's positions and should allow FICC to better
identify and measure the unique risk profiles of those indirect
participants. Therefore, the introduction of the ACS Triparty Service
aligns with the directive to promote the prompt and accurate clearance
and settlement of securities transactions.
---------------------------------------------------------------------------
\34\ See supra note 13, at 97398-99.
---------------------------------------------------------------------------
As discussed in section III.B, the Proposed Rule Change also aligns
the treatment of Initial Haircuts with their treatment in Sponsored GC
Trades. The change would base the Collateral Mark for the transaction
with the Initial Haircut, and not the Contract Price. This change would
ensure that the Initial Haircut remains with the intended party until
final settlement. Furthermore, FICC specifies that Agent Clearing
Transactions with an Initial Haircut will be treated as Off-The-Market
Transactions, and that the party posting the Initial Haircut bears the
loss of that haircut should FICC cease to act for the pre-novation
counterparty. By aligning the treatment of Initial Haircuts in ACS
Triparty Trades with their treatment in the Sponsored GC Service, FICC
provides a consistent treatment for access to central clearing across
both of their principle Indirect Participant triparty transaction
models. This should ensure the prompt and accurate clearance and
settlement of securities transactions. Furthermore, by basing the
Collateral Mark of these transactions on the Initial Haircut, and not
the Contract Price, FICC should ensure that the value of the Initial
Haircut remains with the intended party, thus protecting investors and
the public interest.
Moreover, as described in section III.C, the Proposed Rule Change
clarifies which Agent Clearing Transactions qualify as Same-Day
Settling Trades, aligning treatment of the same with their treatment
within the Sponsored GC Service. Additionally, as described in section
II.B.4, FICC proposes technical and grammatical amendments throughout
the Rules. Enhancing and clarifying the Rules ensures accuracy and
comprehensibility for both Members and Indirect Participants. When
participants have a clear understanding of their rights and obligations
under the Rules, they are more likely to comply, thereby protecting
investors and the public interest and fostering the prompt and accurate
clearance and settlement of securities transactions.
For the foregoing reasons, the Proposed Rule Change is designed to
promote the prompt and accurate clearance and settlement of securities
transactions, consistent with Section 17A(b)(3)(F) of the Exchange Act.
B. Consistency With Rule 17ad-22(e)(18)(iv)(C)
Rule 17ad-22(e)(18)(iv)(C) under the Act requires a covered
clearing agency to establish, implement, maintain, and enforce written
policies and procedures reasonably designed to establish objective,
risk-based, and publicly disclosed criteria for participation, which
when the covered clearing agency provides central counterparty services
for transactions in U.S. Treasury securities, ensure that it has
appropriate means to facilitate access to clearance and settlement
services of all eligible secondary market transactions in U.S. Treasury
securities, including those of indirect participants.\35\
---------------------------------------------------------------------------
\35\ 17 CFR 240.17ad-22(e)(18)(iv)(C).
---------------------------------------------------------------------------
As described in section III.A above, the Proposed Rule Change
provides an additional avenue for Indirect Participants to clearance
and settlement of done-with and done-away triparty repo transactions.
The Commission understands that certain indirect participants who are
limited in their ability to do so due to regulatory, operational,
legal, size, or other challenges, and the creation of the ACS Triparty
Service should allow such indirect participants the ability to use FICC
to clear and settle triparty repos. In particular, the features of the
ACS Triparty Service should make it easier for money market funds and
other cash providers that depend on transfers of securities to maintain
required margin, and typically rely on a triparty repo clearing bank to
administer the collateral management to access FICC's clearance and
settlement services and for clearing members to provide such
access.\36\ Furthermore, the addition of the ACS Triparty Service to
the Agent Clearing Service, as well as modeling the service off the
existing Sponsored GC service, should help ensure that market
participants are able to evaluate and, if they choose, use this service
to access FICC, including for done-away transactions.
---------------------------------------------------------------------------
\36\ Securities Exchange Act Release No. 92014 (May 25, 2021),
86 FR 29334, 29336 (June 1, 2021) (SR-FICC-2021-003).
---------------------------------------------------------------------------
Accordingly, for the reasons discussed above, the Commission finds
that the Proposed Rule Change is consistent with Rule 17ad-
22(e)(18)(iv)(C).
C. Consistency With Rule 17ad-22(e)(19)
Rule 17ad-22(e)(19) requires that FICC establish, implement,
maintain and enforce written policies and procedures reasonably
designed to identify, monitor, and manage the material risks to the
covered clearing agency arising from arrangements in which firms that
are indirect participants in FICC rely on the services provided by
direct participants to access FICC's clearance and settlement
facilities.\37\ The Agent Clearing Service allows Agent Clearing
Members to submit to FICC for comparison, novation, and netting, the
securities transactions of Executing Firm Customers. Executing Firm
Customers are indirect FICC participants that rely on the services
provided by direct FICC participants (i.e., Agent Clearing Members) to
access FICC's clearance and settlement facilities.
---------------------------------------------------------------------------
\37\ 17 CFR 240.17ad-22(e)(19).
---------------------------------------------------------------------------
As outlined above in Sections II and III.A, the proposed ACS
Triparty Service would be an additional part of FICC's Agent Clearing
Service and leverage certain properties of the Sponsored GC Service,
the two current Indirect Participant access models. As a result, FICC's
practices of requiring Agent Clearing Members to identify their
Executing Firm Customers while providing current Legal Entity
Identifiers (``LEIs'') for these customers and confirming their agent
clearing relationships before submitting trades on their behalf will
apply to ACS Triparty Trades as with other Agent Clearing Transactions.
Additionally, Agent Clearing Members serve at the processing agent for
all Executing Firm Customer transactions and are responsible for
posting margin and satisfying any losses arising from these
transactions. Furthermore, FICC will maintain its authority to request
reports and other information from Agent Clearing Members, helping FICC
to
[[Page 61204]]
identify and monitor risks associated with the ACS Triparty Service.
The proposed changes should ensure that Agent Clearing Members would be
responsible for Executing Firm Customer transactions.
Accordingly, for the reasons discussed above, the Proposed Rule
Change is consistent with Rule 17ad-22(e)(19).\38\
---------------------------------------------------------------------------
\38\ Id.
---------------------------------------------------------------------------
D. Consistency With Rule 17ad-22(e)(21)
Rule 17ad-22(e)(21) under the Act requires a CCA to establish,
implement, maintain and enforce written policies and procedures
reasonably designed to be efficient and effective in meeting the
requirements of its participants and the markets it serves, including
the clearing agency's clearing and settlement arrangements and the
scope of the products cleared or settled.\39\ As described in Section
II.B above, the current Agent Clearing Service does not allow Executing
Firm Customers to transact triparty repos. The Proposed Rule Change
seeks to expand the Agent Clearing Service to allow triparty repo
trading to meet the needs of market participants that currently utilize
triparty repo transactions outside of central clearing because they are
not equipped to perform certain functions associated with such repos.
By expanding the Agent Clearing Service to allow for triparty repo
trading, FICC seeks to provide a feasible option for indirect
participants to transact triparty repos in central clearing. Utilizing
certain features present in the Sponsored GC Service including the
limited Funds-Only Settlement Amounts and the settlement of securities
delivery and related payment obligations through the ACS Triparty
Clearing Agent Bank's triparty repo platform, the Proposed Rule Change
should facilitate access to those indirect participants who participate
in triparty repo transactions. These changes should make it more
operationally efficient for indirect participant parties to transact
triparty repo transactions using FICC as the CCP.
---------------------------------------------------------------------------
\39\ 17 CFR 240.17ad-22(e)(21).
---------------------------------------------------------------------------
Accordingly, for the reasons discussed above, the Proposed Rule
Change is consistent with Rule 17ad-22(e)(21).
V. 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), and Rules 17ad-
22(e)(18)(iv)(C),\40\ 17ad-22(e)(19),\41\ and 17ad-22(e)(21) \42\
thereunder.
---------------------------------------------------------------------------
\40\ 17 CFR 240.17ad-22(e)(18)(iv)(C).
\41\ 17 CFR 240.17ad-22(e)(19).
\42\ 17 CFR 240.17ad-22(e)(21).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Exchange Act \43\ that proposed rule change SR-FICC-2025-021 be, and
hereby is, approved.\44\
---------------------------------------------------------------------------
\43\ 15 U.S.C. 78s(b)(2).
\44\ In approving the proposed rule change, the Commission
considered the proposals' 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.\45\
---------------------------------------------------------------------------
\45\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23938 Filed 12-29-25; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on December 30, 2025.
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.