Wall Street Clearing Firm Preps for Tech Glitches with Rule Tweaks
Published Date: 3/27/2025
Notice
Summary
The Fixed Income Clearing Corporation (FICC) is updating its rules to better handle system disruptions that might affect participants using their services. These changes also involve two sister agencies, NSCC and DTC, and aim to keep things running smoothly during tech hiccups. If you’re a participant, expect clearer steps and protections soon, with no immediate cost changes announced.
Analyzed Economic Effects
5 provisions identified: 0 benefits, 5 costs, 0 mixed.
Reconnection needs third‑party report, attestation, indemnity
Before a disconnected DTCC Systems Participant can be reconnected, the Clearing Agencies will require: (i) a detailed, auditable report from a Third-Party Cybersecurity Firm (including timeline, root cause, confirmation of resolution and confirmation of normal operation for at least 72 hours); (ii) an attestation from a Participant Officer confirming report accuracy, remediation implementation and recommendation for reconnection; and (iii) an executed indemnity acceptable to the Clearing Agencies.
Mandatory reconnection testing and approval steps
Prior to approval to reconnect, a DTCC Systems Participant must demonstrate in a test environment that it can send/receive messages and transactions, replay/resubmit, reverse/void, confirm integrity, maintain alternative communications with the Clearing Agency, and meet any other reasonably requested requirements. Approval of reconnection must be made by two or more members of the Clearing Agencies’ senior most management committee after satisfactory testing.
Broader rule coverage for affiliates
If your firm connects with DTCC systems, the rules now explicitly cover Affiliates of participants and entities similar to third-party service providers or service bureaus that connect directly or indirectly on behalf of participants. The definition of “DTCC Systems Participant” is broadened to name specific participant types and include Affiliates and such third parties.
Fast 2-hour disruption reporting requirement
If you are a DTCC Systems Participant, you must provide immediate written notice — and in any event within two hours — to the Clearing Agencies after experiencing or having legal permission to disclose knowledge of an unaffiliated participant’s disruption. Notices must include legal entity names, contact details, event type, start/end dates (if known), scope, and other contextual details.
Stronger noncompliance and responsibility rules
The Disruption Rules replace the ‘‘conflicts’’ provision with a ‘‘failure to comply’’ provision: Respective Participants that fail to comply may face any disciplinary action allowed under Clearing Agencies’ rules; non‑Respective Participants may face actions or obligations under the agreements with the Clearing Agencies; and a participant that authorized another party’s access can be required to assume responsibility for that party’s compliance failures.
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Previous / Next Documents
Previous: 2025-05207, Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change Relating to a Participant System Disruption
The Depository Trust Company (DTC) is updating its rules to better handle system disruptions that could affect its operations. These changes also apply to its sister agencies, FICC and NSCC, making sure everyone is on the same page when tech troubles hit. This update helps protect participants and keeps the system running smoothly, with no immediate cost changes announced.
Next: 2025-05209, Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Increase the Monthly Fee for 10 Gb Physical Ports
Cboe BYX Exchange is raising the monthly fee for its 10 Gb physical ports starting now. This change affects traders and firms using these high-speed connections, meaning they'll pay more each month for faster access. The new fees kick in immediately, so users should be ready for the updated costs.