Fixed Income Clearing Corporation ( FICC ), a subsidiary of the Depository Trust & Clearing Corporation ( DTCC ), has launched an enhanced agent clearing service.

It has also unveiled new capabilities to separate house and customer activity and margin segregation for customers who elect to post margin to FICC, ahead of the March 31 deadline from the US Securities and Exchange Commission ( SEC ).

While the SEC extended the deadlines for mandatory clearing of covered US treasury cash and repo activity, FICC continues to see solid growth in the onboarding of buyside and sellside institutions and increased volumes in its government securities division as firms seek the capital efficiency and liquidity benefits that central clearing provides.

Prior to the SEC’s proposed rule to expand central clearing of US treasury activity, FICC’s volumes were approximately US$4.5 trillion daily. When the SEC’s rule was finalized in December 2023, FICC’s daily volumes reached US$7.2 trillion. Now, FICC is clearing over US$9 trillion daily on average and has experienced multiple daily peaks above US$10 trillion, including at the end of February when volumes topped US$10.4 trillion.

Cleared buyside activity in FICC’s sponsored service saw an 85% year-on-year growth in February, and a peak volume of over US$2 trillion at the end of 2024. Use of FICC’s sponsored service provides the industry with more than US$700 billion in balance sheet capacity each day, and at the end of 2024, balance sheet savings across the industry through the use of the sponsored service topped US$900 billion.

Notably, FICC estimates that it is already clearing nearly half of the outstanding treasury repo covered by the SEC’s clearing requirement, with US money market funds already clearing approximately 46% of their covered US treasury repo activity through FICC today.

Further enhancements set

FICC says it remains committed to delivering further enhancements to its sponsored and agent clearing services later in 2025 to further increase margin and capital efficiencies to attract the remainder of covered treasury repo activity into central clearing at FICC.

FICC also continues to see its client base diversify and expand. Through its enhanced agent clearing service, FICC is supporting over 1,500 customers, including regional broker-dealers, asset managers and principal trading firms. Participation in FICC’s sponsored service also continues to grow, with over 5,800 sponsored member relationships established to date.

“With the additional time granted by the SEC on the expanded clearing deadlines, FICC remains firmly committed to supporting the cleared US treasury market as it continues to evolve and grow, including by collaborating with the industry to roll out enhancements to FICC’s done-away capabilities for treasury cash and repo activity,” says Laura Klimpel, managing director, head of DTCC’s fixed income and financing solutions. “The significant growth in membership and volumes is a testament to the value of central clearing with FICC, and we expect this growth to continue.”

To support growing volumes and membership, FICC says it remains laser-focused on delivering best-in-class risk management and transparency to the US treasury market. It has introduced an enhanced cross-margining arrangement, a new client reporting portal, and  publicly available VaR ( value at risk ) and CCLF ( capped contingency liquidity facility ) calculators, which allow firms to assess, in real time, the margin and liquidity impact of centrally clearing their treasury activity at FICC.

“Robust risk management is a top priority for DTCC. With this launch, FICC also enhanced its intraday monitoring processes to measure exposure changes in 15-minute increments,” says Robert Crain, managing director, FICC market risk. “These capabilities will further reduce risk for participants as well as improve the safety and soundness of the US treasury market.”