The Fixed Income Clearing Corporation (FICC) is a clearinghouse for certain fixed-income securities traded in the United States. It is a subsidiary of the Depository Trust & Clearing Corporation (DTCC) and was established in 2003 as a result of the merger of the Government Securities Clearing Corporation and the Mortgage-Backed Securities Clearing Corporation.
The FICC is responsible for providing a mechanism to ensure that government securities and mortgage-backed securities are settled efficiently and in an orderly fashion. The FICC operates through two main divisions: the Government Securities Division and the Mortgage-Backed Securities Division. The Government Securities Division clears and settles trades in U.S. Treasuries, Treasury Inflation-Protected Securities (TIPS), strips and bills. The Mortgage-Backed Securities Division clears and settles trades in Mortgage-Backed pass-through securities, GNMA, FNMA, and FHLMC certificates.
The FICC works to reduce settlement risk by ensuring that all trades are fully collateralized until settlement. Additionally, the FICC provides a settlement process for members which is secure and efficient. After a trade is executed in the market, the FICC enters the two parties into an agreement and ensures the trade is settled based on predefined rules. This process reduces counterparty risk and eliminates the need for post-trade processing.
The FICC makes sure that all trades are settled in a timely and efficient manner. The corporation monitors the securities and prevents double counting of securities that have been settled twice. In addition, the FICC maintains a Reserve Fund to ensure that all participants in the securities market have sufficient collateral to cover any potential losses.
Overall, the FICC provides a number of solutions to reduce settlement risks, minimize counterparty credit risk, and ensure that the U.S. Government and Mortgage-Backed securities markets are operating efficiently and smoothly. The FICC works to maintain the integrity of the U.S. Treasury and Mortgage-Backed securities markets, to ensure that investors receive the best prices possible, and to help reduce the cost of trading for all involved.
The FICC is responsible for providing a mechanism to ensure that government securities and mortgage-backed securities are settled efficiently and in an orderly fashion. The FICC operates through two main divisions: the Government Securities Division and the Mortgage-Backed Securities Division. The Government Securities Division clears and settles trades in U.S. Treasuries, Treasury Inflation-Protected Securities (TIPS), strips and bills. The Mortgage-Backed Securities Division clears and settles trades in Mortgage-Backed pass-through securities, GNMA, FNMA, and FHLMC certificates.
The FICC works to reduce settlement risk by ensuring that all trades are fully collateralized until settlement. Additionally, the FICC provides a settlement process for members which is secure and efficient. After a trade is executed in the market, the FICC enters the two parties into an agreement and ensures the trade is settled based on predefined rules. This process reduces counterparty risk and eliminates the need for post-trade processing.
The FICC makes sure that all trades are settled in a timely and efficient manner. The corporation monitors the securities and prevents double counting of securities that have been settled twice. In addition, the FICC maintains a Reserve Fund to ensure that all participants in the securities market have sufficient collateral to cover any potential losses.
Overall, the FICC provides a number of solutions to reduce settlement risks, minimize counterparty credit risk, and ensure that the U.S. Government and Mortgage-Backed securities markets are operating efficiently and smoothly. The FICC works to maintain the integrity of the U.S. Treasury and Mortgage-Backed securities markets, to ensure that investors receive the best prices possible, and to help reduce the cost of trading for all involved.