FICC Adds Midday Margin Charge: Boosting Clearing Safety Nets
Published Date: 6/26/2025
Notice
Summary
The Fixed Income Clearing Corporation (FICC) wants to add a new fee called the Intraday Mark-to-Market Charge to better protect against risks during the day. This change affects FICC members who will see updated margin requirements, possibly changing how much money they need to keep on hand. The SEC is now reviewing this proposal and will decide soon whether to approve or reject it.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
New Intraday Margin Charge for Members
FICC proposes to add an "Intraday Mark-to-Market Charge" into the calculation of the Required Fund Deposit and Segregated Customer Margin Requirement for its Government Securities Division (GSD). If you are an FICC member or a Segregated Indirect Participant, this means you could face intraday margin charges when a portfolio’s adverse intraday mark-to-market change meets thresholds such as at least $1,000,000 (Dollar Threshold) and at least 10% of the last calculated VaR Charge (Percentage Threshold), or when the portfolio has fewer than 100 trading days in a rolling 12‑month period or insufficient 12‑month backtesting coverage.
Lower Thresholds During Volatile Markets
Under volatile market conditions, FICC may reduce the Dollar Threshold (but not below $250,000) and the Percentage Threshold (but not below 5%), and may modify or not consider the 12‑month trading day/coverage requirement. FICC will provide members with a minimum of one business day advance notice of parameter changes made because of volatile market conditions.
Waivers and Reductions for Intraday Charges
FICC may waive or decrease the Intraday Mark-to-Market Charge in cases where the intraday mark-to-market change does not reflect FICC's risk exposure (for example, large swings from trade errors). Any waiver or reduction must be approved, documented, and reviewed regularly under FICC procedures.
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