FICC Fine-Tunes Boring Money Payment Rules Quietly
Published Date: 3/5/2025
Notice
Summary
The Fixed Income Clearing Corporation (FICC) is updating its rules about how certain money payments, called Funds-Only Settlement (FOS) payments, are handled. These changes clarify when payments are final, how obligations are cleared, and remove FICC’s ability to offset these payments against required fund deposits. This affects financial firms using FICC’s Government Securities Division and takes effect immediately, helping make money settlements clearer and smoother.
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
FICC Loses Offset Right Against Required Fund Deposits
FICC's proposed rule removes FICC's right to offset a Funds-Only Settlement (FOS) payment due to a Netting Member against any increased amount to that Netting Member's Required Fund Deposit. The change was filed February 20, 2025 and is effective immediately.
FOS Payments Are Settlement, Not Collateral
FICC revised its Government Securities Division (GSD) Rulebook to state that Funds-Only Settlement (FOS) payments are settlement payments and therefore are not collateral under GSD Rule 4. The change was filed February 20, 2025 and was made effective immediately.
Clarified Point of Finality for FOS Payments
FICC's rule change clarifies the point at which Funds-Only Settlement (FOS) payments become final under the GSD Rules. The clarification was filed February 20, 2025 and is effective immediately.
Discharge of Obligations on Payment or Collection
The GSD Rulebook was revised to clarify that obligations are discharged upon payment or collection of a Funds-Only Settlement (FOS) payment. The change was filed February 20, 2025 and is effective immediately.
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