The US Securities and Exchange Commission (SEC) has approved a new client access model for the National Securities Clearing Corporation’s Securities Financing Transaction (SFT) Clearing Service.
The model introduces a new account structure called the Agent Clearing Member Customer Net Margin Account. It allows firms acting in an agency capacity to net margin and clearing fund requirements across underlying client activity, rather than calculating requirements separately for each client position.
According to DTCC, the model is intended to improve capital efficiency for participants using the SFT clearing service.
Linked to existing risk framework
DTCC states that the new structure will operate within NSCC’s existing risk management framework and is aligned with agency clearing models already used at Fixed Income Clearing Corporation (FICC) in the US Treasury repo market.
The organisation also says the model brings the treatment of agency-cleared SFT activity closer to that of proprietary SFT positions.
“This launch changes the economics of central clearing for securities financing transactions in a meaningful way,” said John Vinci, managing director and head of secured funding at DTCC.
The new access model became available immediately following SEC approval.
