Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of Proposed Rule Change To Remove the Activity Limit From the GSD Rules
Published Date: 2/4/2026
Notice
Summary
The Fixed Income Clearing Corporation (FICC) wants to change its rules by removing the activity limit for certain members in its Government Securities Division. Instead, they’ll apply risk checks only to members who trade above a set level, making risk management smarter and more flexible. This change affects sponsoring members and could impact how they manage their trading activities starting soon after approval.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
New Trigger for 'Higher Of' Margin Rule
FICC would apply the 'higher of' VaR calculation to a Sponsored Member or Segregated Indirect Participant only if that entity's total Receive Obligations plus Funds-Only Settlement Amounts across all Accounts exceed FICC's Daily Liquidity Need on a Business Day. If triggered, the 'higher of' methodology would be applied to that entity for the following 25 Business Days.
Most Sponsored Members Would Pay Less Margin
FICC's impact study (April 1, 2024 to October 31, 2025) found 696 Sponsored Members with relevant obligations; under the proposal, 665 Sponsored Members (about 95.5% of the 696) would be positively impacted and would see, on average, a daily reduction in their VaR Charges of about $20.2 million (about 32%).
Small Group Faces Large Margin Increases
The impact study found five Sponsored Members could be subject to the 'higher of' methodology frequently and would experience an average daily increase in VaR Charge of about $144.6 million (about 19%). The five largest single-day increases for those members ranged up to approximately $826.1 million.
Activity Limit Removed for Sponsoring Members
FICC proposes to delete the GSD Rule 3A activity limit that could prevent a Sponsoring Member from submitting activity when its Aggregate VaR Charges exceed its Netting Member Capital. The change is intended to facilitate access to FICC's clearance and settlement services by removing that automatic submission restriction.
Potential Competitive Burden from Higher Margins
FICC acknowledges the proposal could increase Required Fund Deposits and/or Segregated Customer Margin Requirements for some participants, which may burden participants with lower operating margins or higher costs of capital. FICC states any such burden would be necessary and appropriate to safeguard funds and comply with regulatory rules.
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