MFA urged the U.S. Securities and Exchange Commission (SEC) to mandate major revisions to the Fixed Income Clearing Corporation’s (FICC) proposed Treasury clearing rules in a supplemental comment letter.
For the reasons set forth in the letter and given the critical importance of the U.S. Treasury markets to the U.S. and global economies, it is imperative that the Commission ensure that FICC follows through with MFA’s proposed amendments well in advance of the mandate and take other steps to the extent necessary to facilitate done-away trading, cross-margining, and other critical improvements to the Treasury clearing ecosystem. In particular, MFA recommends:
- FICC and the Commission address the failure to address the forced bundling of clearing and execution services
- FICC and the Commission consider measures to facilitate broader cross-margining
- FICC immediately amend the Proposed Rules to recalibrate its minimum segregated margin requirement for indirect participants
- FICC immediately address porting of customer positions and other default management practices
- The Commission address the narrowness of the inter-affiliate exception
