Fixed Income Clearing Corporation (FICC)
Contents
Unraveling the Mysteries of the Fixed Income Clearing Corporation (FICC)
Discover the inner workings of the Fixed Income Clearing Corporation (FICC), a pivotal regulatory agency that oversees the confirmation, settlement, and delivery of fixed-income assets within the U.S. market. From its inception to its role in ensuring efficient clearing and settlement, delve into the intricacies of this essential financial institution.
Understanding the Fixed Income Clearing Corporation (FICC)
The FICC, established in 2003 through the merger of the Government Securities Clearing Corporation (GSCC) and the Mortgage-Backed Security Clearing Corporation (MBSCC), operates under the umbrella of the Depository Trust and Clearing Corporation (DTCC). Comprising two distinct divisions—the Government Securities Division (GSD) and the Mortgage-Backed Securities Division (MBSD)—the FICC plays a vital role in facilitating the seamless settlement of U.S. government-backed securities and mortgage-backed securities (MBS).
The Functions of the Fixed Income Clearing Corporation (FICC)
The GSD
Responsible for managing new fixed-income issuances and reselling government securities, the GSD provides essential netting services for trades involving U.S. government debt instruments. From Treasury bills to government agency securities, the GSD ensures efficient trade matching through its real-time trade matching (RTTM) platform, enabling participants to monitor trade statuses in real-time.
The MBSD
The MBSD division offers real-time automated trade matching, confirmation, risk management, and electronic pool notification services tailored to the MBS market. By providing immediate trade confirmation and guaranteed settlements, the MBSD streamlines MBS transactions for a diverse array of market participants, including mortgage originators, institutional investors, and commercial banks.