The Depository Trust & Clearing Corporation (DTCC)’s Fixed Income Clearing Corporation’s (FICC’s) Government Securities Division (GSD) processed US$8.8 trillion in daily activity on 31st July, up 30% year-on-year (YoY).
Rising volumes and activity in the US Treasury market, the expansion of FICC’s Sponsored Service, which hit peak volumes of US$1.4 trillion on 15th August (up 78% YoY), and growth in the FICC Sponsored GC Service (up 94% YoY) have all contributed to the significant uptick, DTCC said. There are now more than 2,400 sponsored members across 50 jurisdictions participating in FICC clearing.
On the results, Laura Klimpel, managing director and head of DTCC’s fixed income and financing solutions, commented: “Our new milestones in daily activity demonstrate FICC’s robust ability to support rising volumes and volatility and a smooth implementation of the SEC’s expanded US Treasury clearing rules.”
FICC’s Sponsored Service generated an aggregate average of approximately US$500 billion daily in savings over July 2024. Activity peaked on 31st July, where approximately US$616 billion of aggregate balance sheet savings were recorded across the industry, DTCC reported. The service allows sponsoring members to facilitate the submission of their client’s trading activity in eligible securities for novation to FICC. These members act on behalf of their clients to guarantee activity to FICC, reducing counterparty risk, obtaining balance sheet and capital relief and increasing transaction capacity, DTCC summarised.
Klimpel explained: “Our Sponsored Service has become an integral part of the US repo market, offering sponsoring members the ability to sponsor their clients into FICC membership to maximise capital efficiency and offer more funding capacity to the market, increasing overall liquidity.”
“FICC is continually evolving our approach to meet the needs of a broader and more diverse market and support our clients as market structure evolves. As we continue to support increased volumes alongside a much larger member community, FICC will remain a driving force for innovation while ensuring fair and open access for all.”
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