July 23, 2024 - In a letter filed with the Securities and Exchange Commission (SEC) today, the FIA Principal Traders Group (FIA PTG) responded to the Fixed Income Clearing Corporation’s (FICC) trade submission requirement proposal. FIA PTG was disappointed that FICC did not remove existing anti-competitive rules that prevent direct members from clearing with other clearinghouses, despite previous letters urging them to do so.
In addition, FIA PTG said the Proposal includes requirements that are overly burdensome, risk disclosing confidential trade information, and unreasonably raise the barriers to direct membership. These requirements include: an unprecedented triennial independent trade submission review and report requirement; providing FICC with discretionary authority to require applicants for direct membership to obtain an assessment of the applicant’s business plan by an independent third-party consultant at the expense of the applicant; and permitting FICC the authority to require detailed financial information regarding a direct member’s affiliates (beyond the member’s direct parent). FIA PTG believes these requirements would impose significant costs for no tangible benefit.
FIA PTG concluded that the Proposal is anti-competitive, overly burdensome, and should be withdrawn.
