MFA comment letter to SEC on FICC Treasury clearing rulemakings

MFA submitted comments to the Securities and Exchange Commission (SEC) regarding proposed rule changes by the Fixed Income Clearing Corporation (FICC), aimed at addressing new SEC rules regarding the separation of house and customer margin, margin subject to the broker-dealer customer protection rule, and access to FICC’s Treasury clearing services by indirect participants.

MFA believes that the FICC must make additional changes in order for the Treasury Clearing Rules to be successful in promoting deep, liquid, and stable U.S. Treasury security markets, and for FICC to meet its obligations under the Securities Exchange Act of 1934 and Commission rules.

The letter highlights a number of key arguments:

  • FICC Should Adopt Additional Rules to Facilitate Access by Indirect Participants
  • FICC Should Not Adopt the Proposed Rules Until It Has Conducted and Published a Robust Legal Enforceability Analysis
  • FICC Should Not Adopt the Proposed Rules Until There Is a Clear Roadmap to Expand Cross-Margining
  • FICC Should Amend its Rules to Remove Impediments to Accessing Other Clearing Agencies