FICC Fixes Fee Double-Dips in Backtesting Rules
Published Date: 8/5/2025
Notice
Summary
The Fixed Income Clearing Corporation (FICC) is updating how it calculates the Backtesting Charge, making sure it doesn’t double-count fees already collected during the day. This change affects financial firms using FICC’s Government Securities Division and aims to keep charges fair and clear. The update is set to roll out soon, helping everyone understand fees better and avoid surprises.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Intraday margin excluded from coverage
FICC will change the Backtesting Charge calculation so that it excludes amounts that FICC already collected intraday as other margin components from a Member. The change removes the assumption that intraday margin would be collected before a default, which can raise Backtesting Charges and overall margin requirements for Members.
Impact study: larger charges and who is hit
FICC's impact study (June 3, 2024–May 30, 2025) found that excluding intraday-collected amounts would have increased aggregate average daily Backtesting Charges by about $166.61 million (121.2%) for the start-of-day cycle and by $137.41 million (90.3%) for the intraday cycle. During that period 29 Netting Members would have been affected at start of day and 19 at intraday; average per-impacted-member increases were about $5.95 million (8.6%) for start of day and $7.61 million (17.4%) for intraday, with the largest start-of-day increase about $97.26 million (91.8%).
Backtesting Charge calculation clarified
FICC will clarify in its GSD Rules that, when it calculates a firm's backtesting coverage and any Backtesting Charge, it will not include amounts already collected from that firm as a Backtesting Charge. This change describes FICC's current practice and is intended to give Members a clearer explanation of how the Backtesting Charge is calculated.
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